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Directors Report of India Glycols Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Thirty First Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

(Amount in RS. Crores except earnings per share)

Year ended Year ended 31.03.2015 31.03.2014

Sales and Other Income 2601 2914

Profit/(Loss) before 23 105 Depreciation, Exceptional Item and Tax

Exceptional Item (Net) 58 192

Depreciation 81 83

Profit /(Loss) Before Tax (116) (170)

Provision For Tax (55) (50)

Net Profit / (Loss) (61) (120)

Earning Per Share (In RS. ) (19.81) (38.61)

DIVIDEND

In view of the financial performance of your Company, your Directors have not recommended any dividend for the financial year 2014-15.

PERFORMANCE

During the year under review, performance of the Company has been adversely affected on account of depressed global economic situation which has resulted in reduction of commodity demand. The performance of the Company has been adversely affected due to steep fall in prices of the Chemical products and the demand for Guar Gum. The performance was further adversely affected as domestic prices of our feedstock viz. molasses and alcohol, were high on account of poor availability of alcohol and diversion of alcohol towards the implementation of Ethanol Blending with Petrol (EBP) Program of Government of India at an unrealistic price resulting in a sharp increase in the prices of alcohol.

Sales and other income for the year under review has decreased to RS. 2601 Crores as compared to RS. 2914 Crores last year. Loss after depreciation, exceptional items and tax for the year has been RS. 61 Crores as compared to loss of RS. 120 Crores last year.

CHEMICALS

The Company is the largest manufacturer of Bio-Mono Ethylene Glycol (Bio-MEG) in the world made out of renewable feedstock i.e. Molasses and Ethanol. Bio-MEG has an application, apart from other products, in PET bottles, which is used for packaging of beverage products. Sales of Glycols [Monoethylene Glycol (MEG), Diethylene Glycol (dEg), Triethylene Glycol (TeG) and Heavy Glycols] have decreased from 95,342 MT in FY 2013-14 to 90,140 MT in FY 2014-15 and in Sales Value from RS. 758 Crores in FY 2013-14 to RS. 706 Crores in FY 2014-15.

Sales under Ethylene Oxide Derivatives (EOD) business decreased to 99,034 MT in FY 2014-15 from 1,03,713 MT during previous year. However, in value terms it has increased from RS. 1,106 Crores in Fy 2013-14 to RS. 1,109 Crores in FY 2014-15. EOD business has witnessed improvement due to higher prices of Ethylene and Ethylene Oxide in the world market.

During the year, your Company produced 93,029 MT of Glycols compared to 96,275 MT last year. Ethylene Oxide Derivatives (EODs) production has been 1,36,837 MT compared to 1,05,510 MT last year.

EXPORTS

During the year under review, your Company has achieved total export turnover of RS. 1,030 Crores as compared to RS. 1,195 Crores last year. The decline in exports can be attributed to the steep fall in demand and price of guar gum. Your Company hopes to achieve reasonable growth in the overall export sales in the current year though the market conditions remain extremely challenging. Company has been granted 'One Star Export House' status by Government of India.

ETHYL ALCOHOL (POTABLE) & EXTRA NEUTRAL ALCOHOL

During the year, your Company registered total sales of RS. 691 Crores as compared to RS. 657 Crores last year in the Ethyl Alcohol (Potable) division. During the year thrust was given on the export of high quality Extra Neutral Alcohol (ENA) and IGL has gained the position of premium quality ENA suppliers in the international markets.

Monde Selection Committee is conducting evaluation sessions for different categories of consumer products & accordingly provides quality awards. Our Company has won fifth time in a row the prestigious GRAND GOLD AWARD from MONDE SELECTION, Belgium for its high quality of Extra Neutral Alcohol and also the GOLD AWARD for Soulmate Premium Whiskey for the first time.

Company has a tie-up with Bacardi for bottling of their products at our Kashipur bottling unit and Bacardi has also started the bottling of more brands at our bottling facility at Kashipur.

Company is having license for operations in and sale of Country Liquor and Indian Made Foreign Liquor (IMFL) in the States of Uttar Pradesh and Uttarakhand. During the year under review, Company has launched its premium products under the brand name of "V2O Vodka" in three flavors viz. Orange, Green Apple and Smooth. We have also extended the launch of Beach House Premium XXX Rum. During the year, the IMFL brands of the Company have been supplied to Canteen Stores Department (CSD) of Indian Defence Forces. The Company is also in the process of introducing its IMFL brands in the higher range market and a brand building program shall be introduced in the current financial year.

ENNATURE BIO-PHARMA DIVISION (100% EXPORT ORIENTED UNDERTAKING)

Company has a 100% Export Oriented Unit (100% EOU) by the name of Ennature Bio-pharma division. The unit has established Supercritical Fluid Extraction- CO2 and solvent extraction facility at Dehradun. The unit is Current Good Manufacturing Practices (CGMP), ISO 9001, ISO22000, Hazard Analysis and Critical Control Points (HACCP), Kosher and Halal certified. The R&D center at Ennature Bio-Pharma plant at Dehradun is working vigorously on the process of stabilizing and developing various Phytopharmaceutical and Nutraceutical products for the developed markets.

During the year, Company has become a qualified supplier to many large conglomerates worldwide for natural colors, nutraceuticals, health supplements and plant based Active Pharmaceuticals Ingredients (APIs). Company has established its name as a quality manufacturer and supplier with stringent Quality Control (QC) and Quality Assurance (QA) controls in place.

During the year 2014-15, Company has taken several initiatives and improved functioning of the division and reported much better results. Sales turnover of Ennature Bio-Pharma division has increased to RS. 68 Crores as compared to RS. 43 Crores last year and registered a growth of over 60%. Both domestic & export sales have increased and existing product sales have increased with increase in the customer base and more usage from the old customers.

Company has also been able to develop new products like Vinpocetine EP/BP*. Variety in Product Folio available with the Company has created better business opportunities to deeply penetrate into domestic as well as international markets. (*EP/BP - European Pharmacopoeia/British Pharmacopoeia)Company is working towards creating value for its generic products by branding, repositioning & generating technical backup with the help of professional institutes.

INDUSTRIAL GASES

During the year under review, the Company produced approximately 19,195 MT of Oxygen and 1,428 MT of Nitrogen. Both Oxygen and Nitrogen were sold in the market and also used for in house requirement. In addition, Argon of 2,864 MT was also produced and its sales were 2,770 MT.

Industrial Gas Division also produced Beverage and Industrial Grade Liquid Carbon Di-oxide (LCO2) at Kashipur. During the year the Company has produced 36,331 MT of LCO2 and its sale was 35,477 MT.

Company also produced ETO (Ethylene Oxide & Carbon Dioxide Gas Mixtures) under the trade name IGL-STERI GAS at its Kashipur Plant. It is suitable for sterilization of Disposable Surgical & Medical Devices, spices and packing substances like rubber plastic etc. The Company has in house facility for production of EO and LCO2 which are also used in production of ETO and as such it the only plant in India to have such manufacturing facility, which gives us a distinct edge over other suppliers in the market. During the year the Company has sold 913 MT of Steri Gas as compared to 722 MT in the last year.

During the year, the Industrial Gases segment registered total sales of all gases of RS. 38.00 Crores as compared to RS. 40.00 Crores in the last year.

JOINT VENTURE FOR PRIVATE FREIGHT TERMINAL (PFT)

The Company has entered into a Joint Venture with Apollo Logisolutions Limited ("ALS") for setting up a Private Freight Terminal (PFT) and Inland Container Depot (ICD) providing railway based logistic services and other facilities at Bazpur Road, Kashipur, Uttarakhand, as provided under extant guidelines of the Indian Railways. The facility is coming up at the area adjacent to the existing plant of Company at Kashipur.

ALS is engaged in the business of offering complete and comprehensive services relating to container freight station, transportation of containers, cargo handling and has the requisite technical expertise to operate and manage inland container depot. India Glycols Limited holds 48.9% of the capital contribution of the JV Company.

The Joint Venture Company will develop, manage and operate Private Freight Terminal (PFT) and Inland Container Depot (ICD) at Kashipur, Uttarakhand. The facility is expected to be operational by Q3 of this financial year.

The facility shall provide multi-modal logistics solutions to our Company and external customers and enhance its service delivery capacity. With the commissioning of this facility, logistics movement for both inbound and outbound cargo would become more dependable, reliable and economical, would also ensure on-time delivery of goods and enable better inventory management.

EXPANSION / MODERNISATION / DIVERSIFICATION PLANS

Your Company is actively pursuing growth opportunities and looking at areas to reduce its cost of production. The Company is also evaluating plans to further expand its Ethoxylates capacity to improve its product portfolio.

At Dehradun Herbal plant, Diesel boiler has been replaced with green herbal waste/briquette based boiler, which would result in significant fuel cost saving.

With the Commissioning of 12 MW Bio-mass based co- generation plant based on Multi-fuel i.e. Rice Husk & Concentrated Spent Wash (Slop) for Power generation, the Company has started sale of the surplus power to the Power Grid. This new setup is designed to supply approx. 8 MW per hour Power to the Grid after meeting the in- house requirements. With the successful commissioning of this Power Project, we are contributing towards reduction of the power deficit in the Uttar Pradesh State and also meeting our commitment of zero effluent discharge from our distillery Plant.

The Company is setting up a 10 ton biomass/day capacity pilot plant to convert lignocellulosic agricultural waste biomass to ethanol by using the bench-scale process developed at DBT-ICT Centre for Energy Bio-Sciences, Mumbai. The Pilot Plant will use agricultural non-fodder lignocellulosic waste (i.e. Rice Straw, Wheat Straw & Bagasse) as feedstock to manufacture ethanol. The plant will aim at solving technical roadblocks in Lignocellulosic Ethanol Technology in order to improve the overall situation with regard to alcohol availability. The plant is being set-up with the Department of Bio-Technology aid/loan.

The Company has started manufacturing of special spirits, maturation and bottling of high proof brands. The Company has started to produce Bacardi brands including Superior white rum, flavoured rum in five variants, black rum, Eristoff Vodka in four variants and Bacardi whisky. The Company is in the process of developing a new premium range Whisky. The Company is also introducing its premium range Rum for supply to the CSD of Indian Defence Forces.

The Company has also set up a guar-gum based Propylene Oxide (PO) derivatives plant for oil field industry.

The Company in its Board Meeting held on 18th December, 2014 granted approval for the Segregation of the non core rental business of the Company for reducing the debt and improving the liquidity position of the Company. The Shareholders have approved, through Postal Ballot, by way of a special resolution under Section 180(1)(a) and 188 of the Companies Act, 2013 for sale of "Rental Business" of the Company to IGL Infrastructure Private Limited for a consideration of RS. 184.20 Crores being enterprise value. The said segregation shall also help to achieve the other objectives such as reduce business complexity and release management time, provide impetus to future growth and create structure amenable for raising funds through leverage of assets and income.

FINANCE

During the year under review, Company has raised Term Loans of RS. 239 Crores and repaid total loans of RS. 286 Crores. The Company has been regular in meeting its obligations towards payment of principal/interest to Financial Institutions/Banks. Details of the Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

The Company had discontinued its fixed deposits scheme in the financial year 2009-10 and has not accepted any fresh deposits covered under Chapter V of the Companies Act, 2013 during the year. There are no overdue deposits except unclaimed deposits amounting to RS. 3.36 Lacs. During the year, unclaimed deposit of RS. 1.24 Lacs was transferred to IEPF.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company periodically discusses and reviews at its Audit Committee and with its auditors the effectiveness of the internal financial controls measures implemented by the Company including with reference to the Financial Statements of the Company.

The Company has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

LISTING OF SECURITIES

The shares of the Company are listed on BSE Limited and the National Stock Exchange of India Limited (NSE).

SUBSIDIARY COMPANIES

Shakumbari Sugar and Allied Industries Limited

The Company operates a sugar manufacturing plant in the state of Uttar Pradesh through its subsidiary Company M/s Shakumbari Sugar and Allied Industries Ltd. (sSaIL) with a crushing capacity of 7,500 tons crushed per day (T CD) alongwith a modern distillery of 65 KL per day (KLPD) producing high quality rectified spirit and an internal bagasse fired co-generation plant of 11 MW catering to the captive power needs of the sugar and distillery units.

The net worth of Shakumbari Sugar and Allied Industries Limited (SSAIL) has been completely eroded due to accumulated losses and, therefore, the Company has been declared a Sick Industrial Company under the provisions of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) after obtaining necessary consents from its secured lenders including Central Bank of India, IDBI Bank Ltd., etc. IDBI Bank Ltd. being the Operating Agency has prepared and submitted the revival scheme for SSAIL, and the final order of the BIFR on revival of SSAIL is awaited. During the year the operations of the sugar manufacturing plant ceased to operate due to mounting debt burden of the Company and the uneconomical sugar scenario in the State of Uttar Pradesh. During the year ended 31st March, 2015, SSAIL suffered a loss of RS. 25.42 Crores.

IGL Finance Limited

IGL Finance Ltd. (IGLFL) is a 100% subsidiary of the Company. IGL Finance Ltd. had invested funds in short term commodity financing contracts by the National Spot Exchange Ltd. (NSEL). Even though NSEL has defaulted in settling the contracts on due dates we are confident of recovery of our dues from NSEL over a period of time in view of the action taken by the Government and other investigating agencies. Company has so far recovered RS. 10.31 Crores from NSEL. During the year ended 31st March, 2015, IGLFL suffered a loss of RS. 0.74 Lacs.

IGL Chem International Pte. Ltd.

IGL Chem International Pte. Ltd., a 100% subsidiary in Singapore to augment its activities in South Eastern region & help the marketing of products from Chemical Plant, Natural Gums Plant and Supercritical Fluid Extraction facility to large buyers in US, Europe and South East Asia. During the year ended 31st March, 2015, IGL Chem International Pte. Ltd. suffered a loss of RS. 182.19 Lacs.

IGL Chem International USA LLC

Company has also set up a 100% subsidiary company in USA, named as IGL Chem International USA LLC with the main objective of trading in the Company's products and related activities in the American and Latin American regions.

IGL Infrastructure Private Limited

During the year under review, Company has incorporated IGL Infrastructure Pvt. Ltd. as a 100% subsidiary company, with the objectives of acquiring land, estates, buildings, tenements and other property of every description whether freehold or leasehold or other tenure by purchase, lease, exchange, hire or otherwise. During the year under review, the Company has transferred its Rental business on slump sale basis to IGL Infrastructure Pvt. Ltd. for an enterprise value of RS. 184.20 Crores.

Statement containing salient features of the financial statement of subsidiaries/associate company/Joint ventures under first proviso to sub-section (3) of Section 129 in Form AOC-1 forms part of the financial statements.

The Company undertakes that annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the company and of the subsidiary companies concerned. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

BOARD OF DIRECTORS

The Board of Directors of your Company comprises of eight directors including five Independent Directors, one Woman Director who is a Non-executive, Promoter Director, one Managing Director and one Executive Director.

In the 30th Annual General Meeting held on 20th September, 2014, the Company had appointed Shri Pradip Kumar Khaitan, Shri Ravi Jhunjhunwala, Shri Jitender Balakrishnan, Shri R. C. Misra and Shri Jagmohan N. Kejriwal as Independent Directors for a period of 5 years with effect from 1st October, 2014 till 30th September, 2019 in terms of the provisions of Companies Act, 2013 and the Listing Agreement entered into with the Stock Exchanges. The terms and conditions of appointment of the Independent Directors are posted on the website of the Company.

In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors held on 28th May, 2015 stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not disqualified to act as Independent Director.

During the year under review, five Board Meetings were held on 22nd May, 2014, 4th August, 2014, 8th November, 2014, 18th December, 2014 and 14th February, 2015.

Smt. Jayshree Bhartia, Non Executive, Promoter Director is retiring by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for reappointment. Your Directors recommend the reappointment of Smt. Jayshree Bhartia, the retiring Director, for your approval.

The Company has a policy, namely, the "Nomination, Remuneration and Evaluation Policy", which applies to the Board of Directors, Key Managerial Personnel (KMPs) and the Senior Management Personnel of the Company and contains therein the policy followed by the Company regarding directors' and KMPs' appointment and determination of their remuneration and other matters provided under sub-section (3) of section 178.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement with Stock Exchanges, the Independent Directors in their meeting held on 8th November, 2014 evaluated the performance of the Board of Directors of the Company as a whole, the performance of non independent directors individually on the evaluation criteria approved in the Nomination, Remuneration and Evaluation Policy of the Company and evaluated the quality, quantity, timeliness of the flow of information between the Management and the Board.

Pursuant to provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement with Stock Exchanges, the Board has carried out an annual performance evaluation of its own performance as well as the evaluation of the working of its Committees including Audit Committee and Nomination and Remuneration Committee.

The Board followed a mechanism of annual evaluation of the Independent Directors in the Board on the basis of the evaluation criteria approved in the Nomination, Remuneration and Evaluation Policy of the Company. The Independent Directors of the Company have been appointed for a period not exceeding five consecutive years commencing from 1st October, 2014 to 30th September, 2019. The Non - Independent Directors have in their meeting held on 14th February, 2015 evaluated the performance of the Independent Directors during the year.

The Board of Directors of the Company endeavor to perform their job and discharge their duties towards the Company in the best possible manner keeping in mind the highest standards of corporate governance. The Board of your Company follows a mechanism of continuous evaluation of its performance in terms of decision making and ensuring transparency.

Nomination, Evaluation and Remuneration Policy

The Company formulated and adopted Nomination, Remuneration and Evaluation Policy (the "Policy") to provide a framework and set standards for the nomination, remuneration and evaluation of the directors, Key Management Personnel and officials comprising of the senior management.

The basis for the Nomination and Remuneration Committee to select a candidate for appointment to the Board are enhancing the competencies of the Board and attracting as well as retaining talented employees for role of KMP/Senior Officials. When recommending a candidate for appointment, the Nomination and Remuneration Committee has regard to:

a) assessing the appointee against a range of criteria which includes but not be limited to qualifications, skills, regional and industry experience, background and other qualities required to operate successfully in the position, with due regard for the benefits from diversifying the Board;

b) the extent to which the appointee is likely to contribute to the overall effectiveness of the Board, work constructively with the existing directors and enhance the efficiencies of the Company;

c) the skills and experience that the appointee brings to the role of KMP/Senior Official and how an appointee will enhance the skill sets and experience of the Board as a whole;

d) the nature of existing positions held by the appointee including directorships or other relationships and the impact they may have on the appointee's ability to exercise independent judgment;

e) Personal specifications.

The guiding principle for the Remuneration of Directors, Key Managerial Personnel and Senior Management is that the level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate Directors, Key Management Personnel and other senior officials.

The Directors, Key Management Personnel and other senior officials' salary shall be based & determined on the individual person's responsibilities and performance and in accordance with the limits as prescribed statutorily, if any.

The Nominations & Remuneration Committee determines individual remuneration packages for Directors, KMPs and Senior Officials of the Company taking into account factors it deems relevant, including but not limited to market, business performance and practices in comparable companies, having due regard to financial and commercial health of the Company as well as prevailing laws and government/other guidelines. The Committee consults with the Chairman of the Board as it deems appropriate.

The Non Executive Directors shall be entitled to receive remuneration by way of sitting fees for attending every meeting of the Board/ committees as approved by the Board of Directors, profit related commission as may be recommended by the Committee to the Board and subsequently approved by the members. The remuneration payable to the Directors shall be as per the Company's policy and shall be valued as per the Income Tax Rules.

The evaluation/assessment of the Directors, KMPs and the senior officials of the Company is to be conducted on an annual basis.

Following are the criteria that may assist in determining how effective the performances of the Directors / KMPs / Senior officials have been:

* Leadership & stewardship abilities

* contributing to clearly define corporate objectives & plans

* communication of expectations & concerns clearly with subordinates

* obtain adequate, relevant & timely information from external sources.

* review & approval achievement of strategic and operational plans, objectives, budgets

* regular monitoring of corporate results against projections

* identify, monitor & mitigate significant corporate risks

* assess policies, structures & procedures

* direct, monitor & evaluate KMPs, senior officials

* review management's succession plan

* effective meetings

* assuring appropriate board size, composition, independence, structure

* clearly defining roles & monitoring activities of committees

* review of corporation's ethical conduct

Evaluation on the aforesaid parameters will be conducted by the Independent Directors for each of the Executive/ Non-Independent Directors in a separate meeting of the Independent Directors.

The Executive Director/Non-Independent Directors along with the Independent Directors will evaluate/assess each of the Independent Directors on the aforesaid parameters. Only the Independent Director being evaluated will not participate in the said evaluation discussion.

The criteria of making payment to the non-executive Directors of the Company are provided in the Nomination and Remuneration Policy placed on the website of the Company (http://www.indiaglycols.com/investors/downloads/ appointment-remuneration-evaluation-policy.pdf).

KEY MANAGERAL PERSONNEL

During the year under review, the Board of Directors of the Company has designated following Directors/Officials of the Company as Key Managerial Personnel (KMP) of the Company in terms of provisions of Section 203 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges:

1. Shri U.S. Bhartia, Chairman & Managing Director

2. Shri M.K. Rao, Whole time Director

3. Shri Rakesh Bhartia, Chief Executive Officer

4. Shri Anand Singhal, Chief Financial Officer

5. Shri Lalit Kumar Sharma, Company Secretary

No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31 st March, 2015.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In compliance to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company adopted the guidelines & procedures to prevent, prohibit and punish sexual harassment of women at the workplace. The Company constituted an Internal Complaints Committee under the provisions of the Act and the Rules thereunder. The Internal Complaints Committee submitted the Annual Report dated 2nd February, 2015 to the Company pertaining to the status of complaints received and resolved by the Company. The Board considered the said report in its meeting held on 14th February, 2015. No complaint pertaining to Sexual harassment at workplace has been reported to the Company during the year ended March 31st, 2015.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism / Whistle Blower Policy, in accordance with the provisions of the Companies Act, 2013 read with Rules thereunder and the Listing Agreement with the Stock Exchanges to deal with the instances of fraud and mismanagement. The details of the Vigil Mechanism/ Whistle Blower Policy are provided in the Corporate Governance Report and also posted on the website of the Company (http://www.indiaglycols.com/ investors/downloads/vigil-mechanism-policy.pdf).

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls were in place and that the internal financial controls were adequate and were operating effectively; and

(f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and were operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on Management Discussion and Analysis is appended herewith, which shall form part of this Board's Report.

CORPORATE GOVERNANCE

The Board of Directors supports the broad principles of Corporate Governance. The report on Corporate Governance for the year ended 31st March, 2015 as stipulated in clause 49 of the Listing Agreement entered into with the Stock Exchanges and Auditor's Certificate on Corporate Governance are appended with this Board's Report.

STATUTORY AUDITORS & AUDIT REPORT

The Auditors, M/s. Lodha & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and offer themselves for reappointment. The Board recommends the appointment of M/s. Lodha & Co., as the Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. M/s. Lodha & Co., Chartered Accountants, have confirmed that they are eligible under Section 139 and Section 141 of the Companies Act, 2013 and Rules framed thereunder for appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Auditors in their Audit Report have invited the attention of the Shareholders towards non provisioning by the Company against the investment in its Subsidiary Company, Shakumbari Sugar and Allied Industries Limited (SSAIL) amounting to ' 54.28 Crores, loans and advances amounting to RS. 103.69 Crores. The Auditors have also invited the attention of the Shareholders towards Corporate Guarantee extended by the Company on behalf of SSAIL against outstanding amount of Financial Institutions and Banks as stated in Note no. 27(A)(iii) and 32(A)(iii) of the Financial Statements. The Company has already provided its clarification as contained in note no. 32(A) of the Financial Statements i.e. considering the intrinsic value of the investment in Shakumbari Sugar and Allied Industries Limited, (based on valuation report, future projections and long term in nature) and direction issued by the Hon'ble Board for Industrial and Financial Reconstruction (BIFR) for preparation of revival scheme by the operating agency as appointed, which has been filed with BIFR on 11th January, 2014 and also filed TEV (Technical Evaluation Study) with IDBI (Operating Agency) on 9th February, 2015, no provision at this stage is considered necessary by the management against investments and Loans & advances made/given as stated above.

The Auditors have also invited the attention of the Shareholders towards non provisioning by the Company against total exposure of amounting to RS. 147.75 Crores in its 100% Subsidiary Company IGL Finance Limited in its report on Standalone Financial Statements and towards the non provisioning of RS. 144.44 Crores in its report on Consolidated Financial Statements. The Company has also provided its clarification as contained in Note no. 32

(B) of the Financial Statements and Note no. 32 of the Consolidated Financial Statements i.e. Company has total exposure of RS. 147.75 Crores (including Investment in capital of RS. 1.25 Crores) in IGL Finance Ltd. (IGLFL). IGLFL in turn had invested funds for short term in commodity financing contracts offered by National Spot Exchange Ltd. (NSEL). NSEL has defaulted in settling the contracts on due dates and for which IGLFL has initiated legal and other action. Considering the arrangement of merger of NSEL with Financial Technologies (India) Limited (FTIL) and other measure which have so far been taken for and pending before the Govt. and other authorities, the management is confident of recovery of dues from NSEL over a period of time. Accordingly, no provision has been considered necessary at this stage by the company and shown as good and recoverable.

The Auditors have also invited the attention of the Shareholders towards non provisioning by the Company against total exposure of RS. 5.05 Crores in its 100% Subsidiary Company IGL Chem Intll. Pte. Limited, Singapore. The Company has also provided its clarification as contained in Note no. 32(D) of the Financial Statements i.e. considering the strategic and long term nature of investment of RS. 5.05 Crores no provision against the same has been considered necessary by the management.

The Auditors in their report on the Consolidated Financial Statements have invited the attention of the Shareholders towards the non provisioning of interest, penal interest, charges etc. amounting to RS. 9.78 Crores related with a subsidiary company i.e. SSAIL. The Company has also provided its clarification as contained in Note no. 45(a) of the Consolidated Financial Statements i.e. considering that Hon'ble Board for Industrial and Financial Reconstruction (BIFR) has declared Shakumbari Sugar and Allied Industries Limited (SSAIL) as a sick industrial company on 4th April, 2013 and direction issued by them for preparation of revival scheme by the operating agency as appointed, which has been filed with BIFR on 11th January, 2014 and also filed TEV (Technical Evaluation Study) with IDBI (Operating Agency) on 9th February, 2015, management is confident that the said interest amount will be waived under the revival scheme, accordingly no provision at this stage is considered necessary by the management against the same.

The Auditors in their report on the Consolidated Financial Statements have further invited the attention of the Shareholders towards non provision against impairment loss on the fixed assets of the Subsidiary Company i.e. SSAIL. The Company has also provided its clarification as contained in Note no. 42 of the Consolidated Financial Statements i.e. considering the future cash flows and based on the Technical Evaluation Study, management is confident that the expected recoverable value is more than its carrying value, hence no provisioning for impairment loss on its Fixed Assets/Cash Generating Units (CGU) is considered necessary at this stage.

SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT

The Board appointed M/s P.P. Agarwal & Co., Practicing Company Secretaries as Secretarial Auditor for the Financial Year 2014-15 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report dated 26th May, 2015 of M/s P. P. Agarwal & Co., Practicing Company Secretaries, for the financial year ended 31 st March, 2015 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 was considered by the Board in its meeting held on 28th May, 2015 and is enclosed as "Annexure A" to this report. The Secretarial Audit Report does not contain any qualification,reservation or adverse remark which needs any explanation or comment of the Board.

COST AUDITORS

Company has appointed M/s R J Goel & Co., Cost Accountants (FrN 000026) as Cost Auditors of the Company for the financial year 2015-16 under section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 including amendments, if any, subject to the approval of the Shareholders at their ensuing Annual General Meeting and the Central Government. Cost Auditors have confirmed that they are eligible under Section 141 (3) of the Companies Act, 2013 for reappointment. The Cost Auditors have attended the Audit Committee Meeting, where their Report was discussed.

Due date for filing of the Cost Auditors' Report in XBRL mode for the year 2014-15 with Central Government is 31.10.2015. The due date for filing of the Cost Auditors Report in XBRL mode for the year 2013-14 with Central Government was 30.09.2014, however, the Company had filed the same on 26.09.2014.

RELATED PARTY TRANSACTIONS

Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 in the prescribed form enclosed as "Annexure B" forms part of this report. All Related Party Transactions entered into by the Company were granted prior approval of the Audit Committee at its meetings. During the year under review, following two related party transactions were entered into by the Company which were either not in the ordinary course of the business or were not at arm's length price:

1 Discontinuation of charging of Interest on the Inter- corporate Deposits of RS. 160 Crores (RS. 147 Crores Oustanding as on 31.03.2015) provided to its 100% Subsidiary Company, IGL Finance Limited, since these ICDs were invested by IGL Finance Ltd. in short term commodity financing contracts by the National Spot Exchange Ltd. (NSEL). NSEL had defaulted in settling the contracts on due dates, as a result of which IGL Finance could not get the funds back from NSEL. Therefore, IGL Finance Ltd. was unable to service the interest payment to the Company.

2 Transfer of Rental Business on slump sale basis by the Company to its 100% Subsidiary Company IGL Infrastructure Pvt. Ltd. for an enterprise value of RS. 184.20 Crores.

All the other related party transactions entered into by the Company were in the ordinary course of business and at arm's length basis. No material related party transaction i.e. a transaction constituting of 10% of the annual consolidated turnover of the Company was entered into by the Company. The details of related party transactions with the Company as required by Accounting Standard (AS-18) on Related Party Transactions have been given in Notes to Accounts. Besides this, Company has no materially significant transaction with the related parties viz. Promoters, Directors, Key Managerial Personnel, their relatives and their subsidiaries, etc. that may have a potential conflict with the interest of the Company at large. The Policy for Related Party Transactions as approved by the Board has been uploaded on the website of the Company under the link http://www.indiaglycols.com/ investors/downloads/Related-party-transactions-Nov- 2014.pdf.

ENVIRONMENT, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.

Your Company is working actively on various projects efficiently, approaching and targeting towards Clean Development Mechanism (CDM) and reduction in Greenhouse Gases (GHG) emissions.

The Company has installed unique technology for converting distillery spent wash into fuel at both the plants viz. Kashipur (Uttarakhand) and Gorakhpur (Uttar Pradesh). Through this technology, the spent wash is concentrated through five effect evaporator. The concentrate is utilized as fuel to substitute coal in a specifically designed boiler. The high pressure steam so generated is passed through the turbine for power generation and low pressure steam after turbine is utilized in the plant for operation. Due to this your Company is saving fossil fuel in terms of coal and substituting the essential power generation through DG sets. Estimated saving due to Slop utilized during the year under review is as under:

Slop Equivalent Coal savings (net of Evaporator) - 30185 MT

Slop Equivalent Power units savings (net of evaporator) - 3420 MW

The Biomass based Cogeneration Project activity taken up by the Company at its Gorakhpur, U.P. plant is successfully registered under Clean Development Mechanism (CDM) project by United Nations Framework Convention on Climate Change (UNFCCC) for ten year fixed crediting period 16/12/2010 to 15/12/2020. Under the Clean Development Mechanism, emission-reduction (or emission removal) projects in developing countries can earn certified emission reduction credits.

Your Company has received certification of Energy Management System (ISO 50001:2011) under integrated management system.

The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given in "Annexure C" to the Board's Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility (CSR) is a way of conducting business, by which corporate entities visibly contribute to the social good. The essence of CSR is to integrate economic, environmental and social objectives with the company's operations and growth. CSR is the process by which an organization thinks about and evolves its relationships with society for the common good and demonstrates its commitment by giving back to the society for the resources it used to flourish by adoption of appropriate business processes and strategies.

Your Company, Directors and its dedicated employees continue to contribute towards society by several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

Even before the issue of CSR became obligatory, India Glycols Limited was fulfilling the aspiration of the society through voluntary CSR activities for the areas around the periphery of the plant and office sites.

As part of its initiative under Corporate Social Responsibility, the Company has undertaken projects and programmes in the areas of Education promotion, Health and Sanitation, Safe drinking water, Livelihood. Some of the Corporate Social activities undertaken by the Company during the year under review are as follows:

1 Installed Hand Pumps in a phased manner in near by villages of Kashipur and Gorakhpur to provide continuous water facility.

2 Promoted sanitation by Construction of public toilets.

3 Provided Ambulance Services (Ambulance and Driver) for community health care.

4 Organized medical camps where villagers can avail of medical assistance, free of cost;

5 Blanket distribution to poor during winter

6 Contributed for the infrastructure in Govt. Girls High School in Kashipur.

7 Contributed for the infrastructure in Govt. Primary School, a community school in Kashipur.

Your Company is also supporting a community school at Dwarka, New Delhi through charitable organization Nirmal Society for Education Promotion. The school is equipped with modern facilities and also has a good infrastructure. The school possesses qualified and experienced faculties, which enable children to make a great future.

The Company lent financial assistance to the underprivileged children under its CSR activity. Your Company is also extending educational and on-the-job training to the students of many professional Institutions and the professionals of many other Management and Engineering Institutions, which helps them to start a new beginning for their future professional career.

The aforesaid activities are in accordance with Schedule VII of the Companies Act, 2013. In accordance with the provisions of Section 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on Corporate Social Responsibility activities is enclosed as "Annexure D" and forms part of the Board's Report.

Your Company constantly strives hard to serve the society by implementing such other policies which benefited people at large. The company always endeavors to give back the Society for the support the Company has received to rise and flourish.

During the year 2014-15, the Company has spent RS. 109.65 Lacs against the budget for CSR of RS. 109.63 Lacs.

RISK MANAGEMENT POLICY

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Company has constituted a Risk Management Committee in its Board Meeting held on 14th February, 2015. The Committee is authorised to monitor the Risk Management Plan and to mitigate the risks attached to the business of the Company. The Risk Management Committee consists of Directors and the senior management personnel of the Company details whereof are provided in the Corporate Governance Report forming part of the Board's Report.

Your Company's objective of risk management is to have a meaningful identification, measurement, prioritization of risks or exposures to potential losses on a continual basis through active participation of all members of the Company and accordingly establish controls and procedures to build a visible & structured enterprise-wide risk management framework; reduce the risk levels and mitigate their effects in the likelihood of a risk event with an aim to protect our company from harm; and have a contingency plan to manage risks having high probability and high impact.

Risk management framework is created to ensure that risk management principles are implemented and integrated all over the organization and that information retrieved from the risk management process are correctly reported. This framework provides a stable foundation for the risk management work, orient the organizational arrangements properly in order to have a clear risk strategy across the organization & share information, experiences amongst different sites of the Company.

Considering the importance of keeping the risk management process dynamic, a quarterly review of the risks will be carried out across sites and departments for necessary key risks and risk management strategies are to be communicated to the Board of Directors for their assessment for minimization of effects of risk.

EXTRACT OF ANNUAL RETURN

A separate report on the details of the extract of the Annual Return in form MGT-9 is enclosed as "Annexure E", which shall form part of the Board's Report.

AWARDS AND RECOGNITIONS

The Company with great pride is pleased to inform to you that the Company has been honoured with the Silver award selected by Federation of Indian Export Organisation, set up by Ministry of Commerce, Govt. of India for being Second highest foreign exchange earners in the Chemicals, Drugs, Pharma and allied sectors - Non MSME (Micro, Small and Medium Enterprises). The Prestigious award was presented to the Company by Hon'ble President of India in November 2014.

Shri U.S. Bhartia, Chairman and Managing Director of the Company has been conferred with highly prestigious "BUSINESS LEADER OF THE YEAR - INNOVATION" CHEMTECH CEW LEADERSHIP & EXCELLENCE AWARDS 2013", wherein he has been recognized as "An Industrialist with Extraordinary achievements in the core sectors of Indian Economy in conceiving & implementing projects sustainable through value creation and value addition and has always strived for an all-inclusive growth". He has been recognized as an industrialist with visionary concepts based on research and innovation. He has been awarded for his entrepreneurial endeavors, of putting India on the world map by establishing industries based on green technologies in the rural areas, utilizing local resources to produce products of global standards.

HUMAN RESOURCES

Your Directors wish to place on record their deep appreciation to employees at all levels for their all-round efforts, dedication, commitment and loyal services which helped your Company sustain even in a tough year and achieve satisfactory performance during the year.

The required information as per Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in "Annexure F" to this report.

Further, Information regarding employees in accordance with the provisions of Rule 5(2) and Rule 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in "Annexure G" to the Board's Report.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation of the support given by the Central Government, the State Government of Uttarakhand and the State Government of Uttar Pradesh, Financial Institutions and Banks and looks forward to their continued support.

For and on behalf of the Board

Place : NOIDA, U.P. U.S. Bhartia Dated : 28.05.2015 Chairman and Managing Director


Mar 31, 2014

Dear Members

The Directors are pleased to present the Thirtieth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS

(Amount in Rs. Crores except earnings per share)

Year ended Year ended 31.03.2014 31.03.2013

Sales and Other Income 2914 3347

Profit/(Loss) before 105 247 Depreciation, Exceptional Item and Tax

Exceptional Item (Net) 192 0

Depreciation 83 82

Profit Before Tax (170) 165

Provision For Tax (50) 44

Net Profit (120) 121

Earning Per Share (In Rs. ) (38.61) 41.10

DIVIDEND

Your Directors are pleased to recommend a final dividend of Re.1 (Rupee One only) per equity share. The outgo on dividend will be Rs. 3.62 Crores including tax on dividend.

PERFORMANCE

During the year under review performance of the Company has been adversely affected on account of depressed global economic situation which has resulted in reduction of commodity demand. The performance of the Company has been adversely affected due to loss on account of foreign exchange volatility and steep fall in Guargum prices. The performance was further adversely affected as domestic prices of our feedstock viz. molasses and alcohol, was high on account of poor availability of alcohol and diversion of alcohol towards the implementation of Ethanol Blending with Petrol (EBP) Program of Government of India at an unrealistic price resulting in a sharp increase in the prices of alcohol.

Sales and other income for the year under review has been Rs. 2914 Crores as compared to Rs. 3347 Crores last year. Loss after depreciation, exceptional item and tax for the year has been Rs. 120 Crores as compared to profit of Rs. 121 Crores last year.

The current year has been an extra ordinary and abnormal year for the company due to steep fall in guar gum prices and foreign exchange losses.

CHEMICALS

The Company is the largest manufacturer of Bio-MEG in the world made out of renewable feedstock i.e. Molasses and Ethanol. Bio-MEG has an application, apart from other products, in PET bottles, which is used for packaging of beverage products.

Sales of Glycols (MEG, DEG, TEG and Heavy Glycols) has increased from 91,225 MT in FY 2012-13 to 95,342 MT in FY 2013-14 and in Sales Value from Rs. 693 Crores in FY 2012-13 to Rs. 758 Crores in FY 2013-14. Sales under Ethylene Oxide Derivatives (EOD) business decreased marginally to 103,713 MT in FY 2013-14 from 104,755 MT during previous year. However, in value terms it has increased from Rs.1005 Crores in 2012- 13 to Rs. 1106 Crores in FY 2013-14. EOD business has witnessed improvement in profitability due to higher prices of Ethylene and Ethylene Oxide in the world market. During the year, your Company produced 96275 MT of Glycols compared to 91215 MT last year. Ethylene Oxide Derivatives (EODs) production has been 105510 MT compared to 104157 MT last year.

EXPORTS

During the year under review, your Company has achieved total export turnover of Rs. 1195 Crores as compared to Rs. 1772 Crores last year. The steep decline in exports can be attributed to the steep fall in prices of guar gum. Your Company hopes to achieve reasonable growth in the overall export sales in the current year though the market conditions remain extremely challenging. Company has been granted ''One Star Export House'' status by Government of India.

ETHYL ALCOHOL (POTABLE) & EXTRA NEUTRAL ALCOHOL

During the year, your Company registered total sales of Rs. 657 Crores compared to Rs. 660 Crores last year in the Ethyl Alcohol (Potable) division. During the year thrust was given on the export of high quality Extra Neutral Alcohol (ENA).

Company is having license for operations in and sale of Country Liquor and Indian Made Foreign Liquor (IMFL) in the States of Uttar Pradesh and Uttarakhand. During the year under review, Company has launched its premium products under the brand name of"V2O Vodka" in three flavors viz. Orange, Green Apple and Smooth. We have also extended the launch of Beach House Premium XXX Rum. During the year, IMFL brands of the Company have been supplied to Canteen Stores Department (CSD) of Indian Defence Forces. Company is in process of introducing its IMFL brands in the higher range market and brand building program shall be introduced in the current financial year.

Monde Selection Committee is conducting evaluation sessions for different categories of consumer products & accordingly provides quality awards, our Company has won fourth time in a row GRAND GOLD award from MONDE SELECTION, Belgium for its high quality of Extra Neutral Alcohol.

Company has a tie-up with Bacardi for bottling of its products at its Kashipur bottling unit.

ENNATURE BIO-PHARMA DIVISION (100% EXPORT ORIENTED UNDERTAKING)

Company has a 100% Export Oriented Unit (100% EOU) by the name of Ennature Bio-pharma division. The unit has established Supercritical Fluid Extraction- CO2 and solvent extraction facility at Dehradun. The unit is cGMP, ISO 9001, ISO22000, HACCP, Kosher and Halal certified. The R&D center at Ennature Bio-Pharma plant at Dehradun is working vigorously on the process of stabilizing and developing various Phytopharmaceutical and Nutraceutical products for the developed markets. Company during the year developed Indian grown health supplements for the developed market with Zero residual solvents by SCF-CO2 technology. These products have given stupendous boost to the growth of the business of Bio Pharma. During the year, Company has become a qualified supplier to many large conglomerates worldwide for natural colors, nutraceuticals, health supplements and plant based Active Pharmaceuticals Ingredients (APIs). Company has established its name as a quality manufacturer and supplier with stringent QC and QA controls in place.

During the year, sales turnover of Ennature Bio-Pharma division has declined to Rs. 43 Crores as compared to '' 62 Crores last year due to strategic restructuring of the business relationship with a few key customers. Variety in Product Folio available with the Company has created better business opportunities to deeply penetrate into domestic as well as international market, which has encouraged the Company to increase its production capacities from 400 MT to 800 MT.

During the year under review, your Company has created four new process patents to hold intellectual property rights on products namely; Thiocolchicoside, Marigold lutein, DHA and Green Ginger Shogaol.We have also designedvarious new formulations, micro-encapsulated forms from the existing SCF-CO2 process in order to have better product portfolio.

Company is working towards creating value for its generic products by branding, repositioning & generating technical backup with the help of professional institutes.

INDUSTRIAL GASES

The Industrial Gases division producing Oxygen, Nitrogen and Argon has an overall capacity of 13460 NM3/h. During the year under review, Company produced approximately 13549788 NM3 of Oxygen and 955915 NM3 of Nitrogen. Both Oxygen and Nitrogen were successfully marketed and also used for own requirement. Industrial gases division also produced 1553591 NM3 of Argon.

The Industrial Gases division has also produced food and industrial grade liquid Carbon Di-oxide (CO2) at Kashipur Plant having capacities of 160 MT/day each, to meet growing demand in the domestic market. Company has produced 48,187 MT of Carbon Di-oxide (CO2). During the year Industrial Gases segment registered total sales of Rs. 36.08 Cr. compared to Rs. 31.42 Cr. in the last year. During the year the Company for the first time exported Liquid Carbon Di-oxide (LCO2) worth Rs. 4.18 Cr.

Your Company has its own in house facilities for manufacturing of ETHYLENE OXIDE (EO) and Liquid Carbon-Dioxide (LCO2) at its Kashipur plant,suitable for Sterilization of Disposable Surgical & Medical Devices, spices and packing substances like rubber plastic, etc.It is the only plant in Northern India to have such manufacturing facility, therefore, we have a distinct edge over other suppliers in the market.During the year the Company has sold 722 MT of EO-LCO2 as compared to 600 Mt in the last year.

JOINT VENTURE FOR PRIVATE FREIGHT TERMINAL (PFT)

The Company has terminated the Joint Venture agreement with M/s Fourcee Infrastructure Equipments Pvt. Limited (FIEPL) in respect of the Joint Venture for setting up a private freight terminal at Kashipur, Uttarakhand on 23rd June, 2014.

The Company is exploring various possibilities including identifying another partner for the purpose of setting-up, operating and managing the said Private Freight Terminal (PFT) in order to provide multi-modal logistics solutions to our Company and external customers and enhance its service delivery capacity. With the commissioning of this facility, logistics movement for both inbound and outbound cargo would become more dependable, reliable and economical and would also ensure on-time delivery of goods and enable better inventory management.

The total initial equity investment base of the JV Company would be around Rs. 30 Crores, which would be contributed by Joint Venture Partners equally. The estimated project cost would be Rs. 75 Crores. The facility is expected to be commissioned by last quarter of this financial year.

EXPANSION / MODERNISATION / DIVERSIFICATION PLANS

Your Company is actively pursuing growth opportunities and looking at areas to reduce its cost of production. The Company is also evaluating plans to further expand its Ethoxylates capacity to improve its product.

Our Gorakhpur Unit, has commissioned a 12 MW Bio- mass based co-generation plant based on Multi-fuel i.e. Rice Husk & Concentrated Spent Wash (Slop) for Power generation and sale of the surplus power has started to the Power Grid. This new setup is designed to supply approx. 8MW per hour Power to the Grid after meeting the in- house requirements. With the successful commissioning of this Power Project, we will be contributing towards reduction of the power deficit in the Uttar Pradesh State and also meet our commitment of zero effluent discharge from our distillery Plant.

The Company is setting up 10 ton biomass/day capacity pilot plant to convert lignocellulosic agricultural waste biomass to ethanol by using the bench-scale process developed at DBT-ICT Centre for Energy Bio-Sciences, Mumbai. The Pilot Plant will use agricultural non-fodder lignocellulosic waste (i.e. Rice Straw, Wheat Straw & Bagasse) as feedstock to manufacture ethanol. The plant will aim at solving technical roadblocks in Lignocellulosic Ethanol Technology in order to improve the overall situation with regard to alcohol availability. The plant is being set-up with the Department of Bio-Technology aid/loan.

The Company has started manufacturing of special spirits, maturation and bottling of high proof brands. The Company has started to produce Bacardi brands including Superior white rum, flavoured rum in five variants, black rum, Eristoff Vodka in four variants and Bacardi whisky. The Company is in-process of developing new premium range Whisky. The Company is also exploring opportunities for distribution of its IMFL brands in the North-East and Eastern India Markets. The Company is also introducing its premium range Rum in CSD of Indian Defence Forces.

The Company is also setting up a guar gum based PO derivatives plant for oil field industry.

FINANCE

During the year under review, Company has raised Term Loans of Rs. 200 Crores and repaid total loans of Rs. 189 Crores.

The Company has been regular in meeting its obligations towards payment of principal/interest to Financial Institutions/Banks/Fixed Deposit holders.

LISTING OF SECURITIES

The shares of the Company shall continue to be traded at the Bombay Stock Exchange and the National Stock Exchange.

SUBSIDIARY COMPANIES

The Company operates a sugar manufacturing plant in the state of Uttar Pradesh through its subsidiary Company M/s Shakumbari Sugar and Allied Industries Ltd. (SSAIL) with a crushing capacity of 7500 tones crushed per day (TCD) along with a modern distillery of 65 KL per day (KLPD) producing high quality rectified spirit and an internal bagasse fired co-generation plant of 11 MW catering to the captive power needs of the sugar and distillery units. During the year the sugar plant has operated for 72 days and produced 4939.5 MT of White Crystal Sugar. During the year the distillery has manufactured 74.65 lacs KL of rectified spirit.

The net worth of Shakumbari Sugar and Allied Industries Limited (SSAIL) has been completely eroded, therefore, the Company has been declared as Sick Company under the provisions of section 3(1) (o) of the Sick Industrial Companies (Special Provision) Act, 1985. IDBI Bank Ltd. being the Operating Agency has prepared and submitted the revival scheme for SSAIL.

IGL Finance Ltd. is a 100% subsidiary of the Company IGL(F) had invested funds in short term commodity financing contracts by the National Spot Exchange Ltd. (NSEL). Even though NSEL has defaulted in settling the contracts on due dates the action taken by the Government and other investigating agencies, we are confident of recovery of our dues from NSEL over a period of time. Company has a 100% subsidiary in Singapore to augment its activities in South Eastern region & help the marketing of products from Chemical Plant, Natural Gums Plant and Supercritical Fluid Extraction facility to large buyers in US, Europe and South East Asia.

Your Company has three subsidiary companies, i.e. Shakumbari Sugar & Allied Industries Limited (SSAIL), IGL Finance Limited and IGL CHEM International Pte. Ltd. The Ministry of Corporate Affairs, Government of India, vide General Circular dated 8th February 2011 and 21st February 2011 has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular for non-inclusion of Subsidiary Companies'' Annual Report with the Annual Report of the Holding Company. The Company has satisfied the conditions stipulated in the circular and hence have availed the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

The Company undertakes that annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the company and of the subsidiary companies concerned. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

In order to broaden the Company''s activities, your Company has incorporated a 100% subsidiary Company in the United States of America with the main objective for trading & distribution of Company''s product in the American and Latin American regions and any other related activities.

FIXED DEPOSIT

During the year, your Company had neither invited nor accepted any fixed deposits from the public. There are no overdue deposits except unclaimed deposits amounting to Rs. 4.16 Lacs.

DIRECTORS

During the year under review, the Board of Directors of your Company comprised of nine directors out of which seven are Non-Executive Directors, one Managing Director and one Executive Director. Out of the nine Directors, during the year under review, in terms of the listing agreement, the Company has five Independent Directors.However, pursuant to the provisions of the Companies Act 2013, Company has six independent Directors as on 1st April, 2014, therefore, Company has to fix the tenure of the Independent Directors for a period not exceeding 5 years. The Company proposes to fix the term of all independent Directors for a period not exceeding five years from 1st October, 2014 till 30th September, 2019. All Independent Directors have affirmed compliance with the criteria of independence as provided under sub section (6) of Section 149 of the Companies Act,2013 by way of declaration of independence.

Shri Autar Krishna (DIN 00031386) has resigned from the Board of Directors as he is not keeping good health. The Board of Directors at its meeting held on 4th August 2014 has accepted his resignation from the office of Directors and Board Committees with effect from 15th July, 2014. The Board of Directors place on record their deep appreciation for his invaluable professional guidance, considerable talent, poise, commitment and determination.

During the year under review, four Board Meetings were held on 30th May, 2013, 9th August, 2013, 11th November, 2013 and 12th February, 2014. During the year under review, the Shareholders of the Company at their 29th Annual General Meeting had reappointed Shri M.K. Rao as Executive Director for a period not exceeding 5 years w.e.f. 1st April, 2013. Shri U.S. Bhartia, Non-independent Director of the Company, retiring by rotation and being eligible, offer himself for reappointment. Your Directors recommend the reappointment of Shri U.S. Bhartia, the Retiring Director for your approval.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

* in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

* appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2013 and of the profit and loss of the Company for that period;

* proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

* the annual accounts have been prepared on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on Management Discussion and Analysis is appended herewith, which shall form part of this Directors'' Report.

CORPORATE GOVERNANCE

The Board of Directors supports the broad principles of Corporate Governance. The report on Corporate Governance for the year ended 31st March, 2014 as stipulated in clause 49, of the listing agreement with the stock exchanges and Auditor''s Certificate on Corporate Governance are appended with this Directors'' Report.

AUDITORS & AUDIT REPORT

The Auditors, M/s. Lodha & Co., Chartered Accountants, retiring at the ensuing Annual General Meeting and offer themselves for reappointment. The Board recommended the appointment of Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. M/s. Lodha & Co., Chartered Accountants, have confirmed that they are eligible under Section 139 of the Companies Act, 2013 for reappointment.

The Auditors in their Audit Report have invited the attention of the Shareholders towards non- provisioning by the Company against the investment in its subsidiary Company, Shakumbari Sugar and Allied Industries Limited (SSAIL) amounting to Rs. 54.28 Crores, loans and advances amounting to Rs. 102.11 Crores. The Auditors have also invited the attention of the Shareholders towards Corporate Guarantee extended by the Company on behalf of SSAIL against outstanding amount of Financial Institutions and Banks as stated in Note 27 (A) (iii) of the Financial Statements. The Company has already provided its clarification as contained in note no.34 (A) of the Financial Statements i.e. considering the intrinsic value of the investment in Shakumbari Sugar and Allied Industries Limited, (based on valuation report, future projections and long term in nature) and direction issued by the Hon''ble Board for Industrial and Financial Reconstruction (BIFR) for preparation of revival scheme by the operating agency as appointed, which has been filed with BIFR on 11th January 2014, no provision at this stage is considered necessary by the management against investments and Loans & advances made/given as stated above.

The Auditors have also invited the attention of the Shareholders towards non- provisioning by the Company against total exposure of amounting to Rs. 148.49 Crores in its 100% subsidiary Company IGL Finance Limited. The Company has also provided its clarification as contained in note no. 34 (B) of the Financial Statements i.e. Company has total exposure of Rs. 148.49 crores (including Investment in capital of Rs. 1.25 Crores) in IGL Finance Ltd. (IGLFI). IGLFI in turn had invested funds for short term in commodity financing contracts offered by National Spot Exchange Ltd. (NSEL). NSEL has defaulted in settling the contracts on due dates. Considering the present state of affairs, action taken by the Govt. and other authorities, the management is confident of recovery of dues from NSEL over a period of time. Accordingly, no provision has been considered necessary at this stage by the company and shown as good and fully recoverable.

COST AUDITORS

Company has appointed M/s R J Goel & Co., Cost Accountants (FRN 000026) as Cost Auditors of the Company for the financial year 2014-15 under section 148 of the Companies Act, 2013, subject to the approval of the Shareholders at their ensuing Annual General Meeting and the Central Government. Cost Auditors have confirmed that they are eligible under Section 141 (3) of the Companies Act, 2013 for reappointment. The Cost Auditors have attended the Audit Committee Meeting, where their Report was discussed.

Due date for filing of the Cost Auditors Report in XBRL mode for the year 2013-14 with Central Government is 30th September, 2014. The due date for filing of the Cost Auditors Report in XBRL mode for the year 2012-13 with Central Government was 30th September, 2013, however, the Company had filed the same on 28th November, 2013.

ENVIRONMENT, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.

Your Company is working actively on various projects efficiently, approaching and targeting towards Clean Development Mechanism (CDM) and reduction in GHG emissions.

The Company has installed unique technology for converting distillery spentwash into fuel at both the plants viz. Kashipur and Gorakhpur. Through this technology, the spentwash is concentrated through five effect evaporator. The concentrate is utilized as fuel to substitute coal in a specifically designed boiler. The high pressure steam so generated is passed through the turbine for power generation and low pressure steam after turbine is utilized in the plant for operation. Due to this your Company is saving fossil fuel in terms of coal and substituting the essential power generation through DG sets. Estimated saving due to Slop utilized during the year under review is as under: Slop Equivalent Coal savings (net of Evaporator) - 32300 MT Slop Equivalent Power units savings (net of evaporator) - 3255 MW

The Biomass based Cogeneration Project activity taken up by the Company at its Gorakhpur, U.P. plant is successfully registered under Clean Development Mechanism (CDM) project by United Nations Framework Convention on Climate Change (UNFCCC) for ten year fixed crediting period 16/12/2010 to 15/12/2020. Under the Clean Development Mechanism, emission-reduction (or emission removal) projects in developing countries can earn certified emission reduction credits.

Your Company has received certification of Energy Management System (ISO 50001:2011) under integrated management system.

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 and the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 the required information relating to"Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo" is annexed hereto and forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company, Directors and its dedicated employees continue to contribute towards society by several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

In compliance to the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 passed with effect from 1st April, 2014, the Board of Directors formed a CSR Committee comprising of Shri U.S.Bhartia, Chairman and Managing Director, Shri M.K. Rao, Executive Director, Shri R.C. Misra, Independent Director and Shri P.K. Khaitan, Independent Director as the members of the Committee. The CSR Committee formulated a CSR Policy and the same is enforced with effect from the current financial year. The Company has also placed the CSR policy on its website.

Some of the Corporate Social activities voluntarily undertaken in and around Kashipur (Uttarakhand state) during the year under review are as follows:

1 Organising Village Medical Camp and Medical Eye Camp so that villagers get medical assistance.

2 Sponsoring Medical treatment for people in need.

3 Facilitating Wall repair and Whitewashing of community buildings.

4 Installed hand pumps for drinking water at villages.

5 Fogging of pesticide in village.

6 Distribution of Blankets to Poor Homeless families.

7 Extended support to the victims of Flood affected people.

8 Distribution of School Uniforms to Poor Children at the Villages Schools.

9 Organising NSS Camp and Bharat Sewa Mission for villagers evacuation during flood.

10 Providing financial assistance to Hospitals for old age patients, educational institute for education support to handicap students and NGOs for poor girls marriage.

Your Company is also supporting a community school at Dwarka, New Delhi through charitable organization Nirmal Society for Education Promotion. The school is equipped with modern facilities and also has a good infrastructure. The school possesses qualified and experienced faculties, which enable children to make a great future.

The Company lent financial assistance to the underprivileged children under its CSR activity. Your Company is also extending educational and on-the-job training to the students of many professional Institutions and the professionals of many other Management and Engineering Institutions, which helps them to start a new beginning for their future professional career.

At the end your Company constantly strives hard to serve the society by implementing such other policies which benefited people at large. The company always endeavors to give back the Society for the support the Company has received to rise and flourish.

HUMAN RESOURCES

Your Directors wish to place on record their deep appreciation to employees at all levels for their all-round efforts, dedication, commitment and loyal services which helped your Company sustain even in a tough year and achieve satisfactory performance during the year.

The required information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the Statement of particulars of Employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at Head Office of the Company.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation of the support given by the Central Government, States of Uttarakhand and Uttar Pradesh, Financial Institutions and Banks and looks forward to their continued support.

for and on behalf of the Board

Place : NOIDA, U.P. U.S. Bhartia Dated : 04.08.2014 Chairman and Managing Director


Mar 31, 2013

To The Members

The Directors are pleased to present the Twenty Ninth Annual Report together with the Audited Accounts of the Company for the year ended 31 st March, 2013.

FINANCIAL RESULTS

(Amount in Rs. lacs except earnings per share)

Year ended Year ended 31.03.2013 31.03.2012

Sales And Other Income 334,661 263,325

Profit/(Loss) Before 24,743 23,441 Depreciation, Exceptional Item And Tax

Depreciation 8,243 7,753

Profit Before Tax 16,500 15,688

Provision For Tax 4,386 5,229

Net Profit 12,094 10,459

Earning Per Share (In Rs.) 41.10 37.51

INCREASE IN AUTHORISED SHARE CAPITAL

During the year under review, the company has increased its Authorised Share Capital from Rs. 30 Crores to Rs. 45 Crores. The paid up Capital of the Company has also increased from Rs. 2788.25 Lacs to Rs. 3096.15 Lacs due to allotment of 3,079,000 Equity Shares of Rs. 10 each at a premium of Rs.128.36 per Shares to Promoters and Promoters'' group on preferential allotment basis, in accordance with the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009.

DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 2 (Rupees Two only) per equity share. The outgo on dividend will be Rs. 724.47 Lacs including tax on dividend. During the year under review, your Company has also paid interim dividend of Rs. 4 (Rupees Four only) per equity share.

PERFORMANCE

During the year under review, the growth in Profit was possible as a result of higher sales realization, increased production and productivity, better cost management and operational efficiencies.

Sales and other income for the year under review has been Rs. 334,661 Lacs as compared to Rs. 263,325 Lacs last year registering an increase of 27%. Profit/(Loss) from operations before depreciation & tax for the year was Rs. 24,743 Lacs as compared to Rs. 23,441 Lacs last year. The

Net Profit after Tax for the year was Rs. 12,094 Lacs as compared to Net Profit of Rs. 10,459 Lacs last year showing an increase of 16%.

During the year under review sales of Glycols (MEG, DEG, TEG and Heavy Glycols) has increased to 91,215 MT as compared to 82,639 MT during the last year and in Sales Value to Rs. 69,337 Lacs from Rs. 59,211 Lacs as compared to last year. The Company has witnessed an increase in Exports at Rs.1,77,197 Lacs as compared to Rs. 1,25,456 Lacs during the last year. The Company has shown a remarkable performance in export sales and registered a growth of 41 % despite slowdown in the international markets.

The Company is the largest manufacturer of Bio-MEG in the world made out of agriculture feedstock i.e. Molasses and Ethanol. Bio-MEG has an application, apart from other products, in PET bottles, which is used for packaging of beverage products.

The EO Derivatives business has registered higher sales volume of 1,04,157 MT during the year under review as compared to 94,902 MT during previous year and also higher Sales Value at Rs.1,00,525 Lacs compared to Rs. 88,959 Lacs during the previous year.

The performance of Natural Gums Division under the Chemical Segment had been overwhelming during the year under review. Your company has carved a niche in world market and now is known as a consistent quality manufacturer.

Natural Gums business segment witnessed growth in profits due to higher sales realization. During the year under review, Guar gum powder and derivatives sales has increased to Rs. 74,243 Lacs as compared to Rs. 39,491 Lacs during previous year and registered a growth of 88% over the last year.

The borrowing cost has increased to Rs. 13,272 Lacs as compared to Rs.11,320 Lacs last year, due to increase in the borrowings as well as increase in the overall interest rates by all the banks.

EXPORTS

During the year under review, your Company has achieved total export turnover of Rs. 177,197 Lacs as compared to Rs.125,456 Lacs last year. Your Company hopes to achieve reasonable growth in the overall export sales in the current year though the market conditions remain extremely challenging. Company has been granted ''One Star Export House'' status by Government of India.

ETHYL ALCOHOL (POTABLE) & EXTRA NATURAL ALCOHOL

During the year, your Company registered total sales of Rs. 66,027 Lacs compared to Rs. 50,168 Lacs last year in the Ethyl Alcohol (Potable) division. During the year thrust was given on the export of high quality Extra Neutral Alcohol (ENA). The Company was awarded Grand Gold Award for the second consecutive year from MONDE SELECTION, Belgium for its high quality of Extra Neutral Alcohol.

Company has the most modern captive distillery in Asia and is having license for operations in and sale of Country Liquor and Indian Made Foreign Liquor (IMFL) in the States of Uttar Pradesh and Uttarakhand. During the year, IMFL brands of the Company have been supplied to Canteen Stores Department (CSD) of Indian Defence Forces.

Company has a tie-up with Bacardi for bottling of their products at our Kashipur bottling unit.

Company is in process of introducing its IMFL brands in the higher range market and brand building program shall be introduced in the current financial year.

ENNATURE BIO-PHARMA DIVISION (100% EXPORT ORIENTED UNDERTAKING)

Company has a 100% Export Oriented Unit (100% EOU) by the name of Ennature Bio-pharma division. The unit has established Supercritical Fluid Extraction- CO2 and solvent extraction facility at Dehradun. The unit is GMP, ISO 9001, ISO22000, HACCP, Kosher and Halal certified. Unit at Dehradun has started production and R&D center duly recognized by Ministry of Science & Technology Government of India is working vigorously on the process of stabilizing and developing various Phytopharmaceutical and Nutraceutical products for the developed markets.

Company during the year developed Indian grown health supplements for the developed market with Zero residual solvents by SCF-CO2 technology. These products have given stupendous boost to the growth of the business of Bio-Pharma. During the year, Company has become a qualified supplier to many large conglomerates worldwide for natural colors, nutraceuticals, health supplements and plant based Active Pharmaceuticals Ingredients (APIs). Company has established its name as a quality manufacturer and supplier with stringent QC and QA controls in place.

During the year, Ennature Bio-Pharma division achieved a turnover of Rs. 6,422 Lacs as compared to Rs. 3,638 Lacs during the last year and registered a growth of 77% over the last year. Variety in Product Folio available with the Company has created enhanced business opportunity and a better penetration into domestic as well as international market.

Your company has enhanced its production capabilities from 200 MT to 400 MT hence achieved better plant utilization from 55% to 75%.

During the year under review, your Company has created four new process patents to hold intellectual property rights on products namely; Thiocolchicoside, Marigold lutein, DHA and Green Ginger Shogaol.We have also designed various new formulations, micro-encapsulated forms from the existing SCF-CO2 process in order to have better product portfolio.

Company is working towards creating value for its generic products by branding, repositioning & generating technical backup with the help of professional institutes.

INDUSTRIAL GASES

The Industrial Gases division producing Oxygen, Nitrogen and Argon with an overall capacity of 13,460 NM3/h. During the year under review, Company produced approximately 669 lacs NM3 of Oxygen and 231lacs NM3 of Nitrogen. Both Oxygen and Nitrogen were successfully marketed and also used for own requirement. Industrial gases division also produced 16 lacs NM3 of Argon.

The Industrial Gases division has also produced food and industrial grade liquid Carbon Di-oxide (CO2) at Kashipur Plant having capacities of 160 MT/day each, to meet growing demand in the domestic market. Company has produced 50,073 MT of Carbon Di-oxide (CO2). During the year, Industrial Gases segment registered total sales of Rs. 3,390 Lacs compared to Rs. 3,144 Lacs last year.

Your Company has its own in house facilities for manufacturing of ETHYLENE OXIDE (EO) and Liquid Carbon-Dioxide (CO2) at its Kashipur plant,suitable for Sterilization of Disposable Surgical & Medical Devices, spices and packing substances like rubber plastic etc.It is the only plant in Northern India to have such manufacturing facility, therefore, we have a distinct edge over other suppliers in the market.

During the year under review, Company has registered total sale of 600 MT of EO CO2 having a value of Rs. 2.49 Crores and Company hopes to achieve better results in coming years.

JOINT VENTURE FOR PRIVATE FREIGHT TERMINAL (PFT)

The Company has a Joint Venture with Fourcee Infrastructure Equipments Pvt. Limited (FIEPL) for setting up a private freight terminal providing railway based logistic services and other facilities at Kashipur, Uttarakhand, as provided under extant guidelines of the Indian Railways. The facility is coming up at the area adjacent to the existing plant of Company at Kashipur.

The Parties have entered into a Joint Venture Agreement to co-operate and partner with each other for the purpose of setting-up, operating and managing the said Private Freight Terminal (PFT) in order to provide multi- modal logistics solutions to our Company and external customers and enhance its service delivery capacity. With the commissioning of this facility, logistics movement for both inbound and outbound cargo would become more dependable, reliable, economical, would also ensure on-time delivery of goods and enable better inventory management.

The total initial equity investment base of the Company would be around Rs. 30 Crores, which would be contributed by Joint Venture Partners equally. The estimated project cost would be Rs.75 Crores. The facility is expected to be commissioned by last quarter of this financial year.

EXPANSION / MODERNISATION / DIVERSIFICATION PLANS

The Company is actively pursuing growth opportunities and looking at areas to reduce its cost of production. Company is also evaluating plans to further expand its Ethoxylates capacity to improve its product mix and also considering the setting up of a Power Plant to reduce its dependence on external power.

Company has installed another SLOP fired boiler at Kashipur, which will provide additional coal saving.

The Company is setting up 10 ton biomass/day capacity pilot plant to convert lignocellulosic agricultural waste biomass to ethanol by using the bench-scale process developed at DBT-ICT Centre for energy Bio-Sciences, Mumbai. The Pilot Plant will use agricultural non-fodder lignocellulosic waste (i.e. Rice Straw, Wheat Straw & Bagasse) as feedstock to manufacture ethanol. The plant will aim at solving technical roadblocks in Lignocellulosic ethanol Technology in order to improve the overall situation with regard to alcohol availability. The plant is being set- up with the Department of Bio-Technology aid/loan.

FINANCE

During the year under review, Company has raised Term Loans of Rs. 36,574Lacs and repaid total loans of Rs. 29,613 Lacs

The Company has been regular in meeting its obligations towards payment of principal/interest to Financial Institutions/ Banks/Debenture holders/Fixed Deposit holders.

ADOPTION OF POLICY FOR PROTECTION OF WOMEN AT WORKPLACE

In compliance to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 passed with effect from 23rd April 2013, the Company adopted the guidelines & procedures to prevent, prohibit and punish sexual harassment of women at the workplace. The policy as approved by the Board is enforced with immediate effect and an Internal Complaints Committee is constituted thereunder.

LISTING OF SECURITIES

The shares of the Company shall continue to be traded at the Bombay Stock Exchange and the National Stock Exchange.

SUBSIDIARY COMPANIES

The Company operates a sugar manufacturing plant in the state of Uttar Pradesh with a crushing capacity of 7500 tones per day (TCD) alongwith a modern distillery of 60 KL per day (KLPD) producing high quality rectified spirit and an internal bagasse fired co-generation plant of 11 MW catering to the captive power needs of the sugar and distillery units.

The net worth of Shakumbari Sugar and Allied Industries Limited (SSAIL) has been completely eroded, therefore, the Company has been declared as Sick Company under the provisions of section 3(1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985. The BIFR has directed IDBI Bank Ltd. being the Operating Agency to prepare and submit the revival scheme for SSAIL.

Company has a 100% subsidiary in Singapore to augment its activities in South Eastern region & help the marketing of products from Chemical Plant, Natural Gums Plant and Supercritical Fluid Extraction facility to large buyers in US, Europe and South East Asia.

Your Company has three subsidiary companies, i.e. Shakumbari Sugar & Allied Industries Limited (SSAIL), IGL Finance Limited and IGL CHEM International Pte. Ltd. The Ministry of Corporate Affairs, Government of India, vide General Circular dated 8th February 2011 and 21st February 2011 has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular for non-inclusion of Subsidiary Companies'' Annual Report with the Annual Report of the Holding Company. The Company has satisfied the conditions stipulated in the circular and hence have availed the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

The Company undertakes that annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the Company and of the subsidiary companies concerned. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

FIXED DEPOSIT

During the year, your Company had neither invited nor accepted any fixed deposits from the public. There are no overdue deposits except unclaimed deposits amounting to Rs. 6.86 Lacs.

DIRECTORS

Smt. Jayshree Bhartia, Shri Jagmohan N Kejriwal and Shri M.K. Rao, Directors of the Company, retiring by rotation and being eligible, offer themselves for reappointment. Your Directors recommend the reappointment of retiring Directors for your approval.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- appropriate accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2013 and of the profit and loss of the Company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the annual accounts have been prepared on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate report is appended herewith.

CORPORATE GOVERNANCE

The Board of Directors supports the broad principles of Corporate Governance. The report on Corporate Governance as stipulated in clause 49, as amended, of the listing agreement with the stock exchanges for the year ended 31st March, 2013 and Auditor''s Certificate on Corporate Governance are appended herewith.

AUDITORS & AUDIT REPORT

The Auditors, M/s. Lodha & Co., Chartered Accountants, retiring at the ensuing Annual General Meeting and offer themselves for reappointment. They have confirmed that they are eligible under Section 224(1B) of the Companies Act, 1956 for reappointment.

The Auditors in their Audit Report have invited the attention of the Shareholders towards non- provisioning by the Company against the investment in its subsidiary Company, Shakumbari Sugar and Allied Industries Limited (SSAIL) amounting to Rs. 5,427.50 Lacs and loans amounting to Rs. 1,713.30 Lacs. The Auditors have also invited the attention of the Shareholders towards Corporate Guarantee extended by the Company on behalf of SSAIL against outstanding amount of Financial

Institutions and Banks as stated in Note 27 (A) (iii) of the Financial Statements. The Company has already provided its clarification as contained in note no.34 of the Financial Statements i.e. considering the intrinsic value of the assets of SSAIL & long term nature of the investment and directions issued by BIFR for preparation of revival scheme by the Operating Agency, the management is confident of the recoverability/realisability of the value of Investment and loans provided to SSAIL, therefore, no provision in the opinion of the Management at this stage is considered necessary.

COST AUDITORS

Company has appointed M/s R J Goel and Co., Cost Accountants as Cost Auditors of the Company for the financial year 2012-13 under section 233B of the Companies Act, 1956. Cost Auditors have confirmed that they are eligible under Section 224(1B) of the Companies Act, 1956 for reappointment. The Cost Auditors have attended the Audit Committee Meeting, where their Report was discussed.

Due date for filing of the Cost Auditors Report in XBRL mode for the year 2012-13 with Central Government is 30th September, 2013. The due date for filing of the Cost Auditors Report in XBRL mode for the year 2011-12 with Central Government was 28th February, 2013, however, the Company had filed the same on 29th December, 2012.

ENVIRONMENT, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.

The Company is working actively on various projects efficiently, approaching and targeting towards Clean Development Mechanism (CDM) and reduction in GHG emissions.

The Company has installed unique technology for converting distillery spentwash into fuel at both the plants viz. Kashipur and Gorakhpur. Through this technology, the spentwash is concentrated through five effect evaporator. The concentrate is utilized as fuel to substitute coal in a specifically designed boiler. The high pressure steam so generated is passed through the turbine for power generation and low pressure steam after turbine is utilized in the plant for operation. Due to this the Company is saving fossil fuel in terms of coal and substituting the essential power generation through DG sets.

The Biomass based Cogeneration Project activity taken up by the Company at its Gorakhpur, U.P. plant is successfully registered under Clean Development Mechanism (CDM) project by United Nations Framework Convention on Climate Change (UNFCCC) for ten year fixed crediting period 16/12/2010 to 15/12/2020. Under the Clean Development Mechanism, emission-reduction (or emission removal) projects in developing countries can earn certified emission reduction credits. These saleable credits can be used by developed countries to meet a part of their emission reduction targets under the Kyoto Protocol.

Your Company has received certification of Energy Management System (ISO 50001:2011) under integrated management system.

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 and the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 the required information relating to "Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo" is annexed hereto and forms part of this Report.

HUMAN RESOURCES

Your Directors wish to place on record their deep appreciation to employees at all levels for their all-round efforts, dedication, commitment and loyal services which helped in achieving satisfactory performance during the year.

The required information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the Statement of particulars of Employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at Head Office of the Company.

CORPORATE SOCIAL RESPONSIBILITY

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company, Directors and its dedicated employees continue to contribute towards society by several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility. The range of following Corporate Social activities begins in and around Kashipur (Uttarakhand):

1 organizing regular Medical camps (three days a week) so that villagers get medical assistance free of cost;

2 organizing blood donation camps;

3 facilitating plantation of trees for better environment;

4 facilitating in constructing roads, bridges, drains and installing street lamps;

5 promoting schools in vicinity (Ajay Bhartia Saraswati

Shisu Mandir Jr. High School, Kashipur);

6 providing furniture and financial assistance for renovation of Community School at village Barkhedi, Kashipur;

7 installed hand pumps for drinking water, which is benefitting nearby areas;

8 extended support to the victims of flood affected during Monsoon;

9 distribution of blankets to poor during winter;

10 providing financial assistance for promotion of sports and socio-cultural activities in the State of Uttarakhand;

11 supporting the local administration in fighting and managing fire accidents and other disasters taking place in the surrounding area of Plant;

12 Sponsoring medical treatment for people in need.

Your Company is supporting a community school at Dwarka, New Delhi through a charitable organization Nirmal Bhartia Society for Education Promotion. The school is equipped with modern facilities and also has a good infrastructure. The school possesses qualified and experienced faculties, which enable children to make a great future.

The Company lent financial assistance to the underprivileged children under its CSR activity. Your Company is also extending educational and on-the-job training to the students of many professional Institutions and the professionals of many other Management and Engineering Institutions, which helps them to start a new beginning for their future professional career.

The Company has lent a helping hand to the affected people of Uttarakhand natural calamity by providing financial assistance.

At the end your Company constantly strives hard to serve the society by implementing such other policies which benefited people at large. The company always endeavors to give back the Society for the support the Company has received to rise and flourish.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation of the support given by the Central Government, States of Uttarakhand and Uttar Pradesh, Financial Institutions and banks and looks forward to their continued support.

for and on behalf of the Board

Place : NOIDA, U.P. U.S. Bhartia

Dated : 30.05.2013 Chairman and Managing Director


Mar 31, 2012

The Directors are pleased to present the Twenty Eighth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2012.

Financial Results

(Amount in Rs. lacs except earnings per share) Year ended Year ended 31.03.2012 31.03.2011

Sales and Other Income 258,439 163,812

Profit before Depreciation, 22,537 10,538 Exceptional Item and Tax

Depreciation 7,753 6,862

Exceptional Item (904) Nil

Profit before Tax 15,688 3,676

Provision for Tax (5,229) (1,114)

Net Profit 10,459 2,562

Earning per share 37.51 9.19

Dividend

Your Directors are pleased to recommend a dividend of Rs. 3.00 (Rupees Three only) per equity share. The outgo on dividend will be Rs. 972.18 lacs including tax on dividend.

Performance

During the year under review, the growth in Profit was possible as a result of increased production and productivity, higher sales realization, better Cost management and operational efficiencies.

Ethylene Oxide Derivatives (EOD) business has witnessed improvement in profitability due to higher prices of Ethylene and Ethylene Oxide in the world markets. Improved capacity utilization has resulted in better cost Management. Company has also diversified towards production of Natural gums products, which has witnessed higher export prices realization and resultant high profit margins.

Sales and other income for the year under review has been Rs. 2,58,439 Lacs as compared to Rs. 1,63,812 Lacs last year showing an increase by 58% vis a vis last year. Profit before depreciation, exceptional item and tax for the year was Rs. 22,537 Lacs as compared to Rs. 10,538 Lacs last year showing an increase by 114%. The net profit after tax for the year was Rs. 10,459 Lacs as compared to Net Profit of Rs. 2,562 Lacs last year showing an increase by 308%.

The borrowing cost has increased to Rs. 11,320 lacs as compared to Rs. 9,152 lacs last year, due to increase in the borrowings as well as increase in the overall interest rates by all the banks.

During the year, your Company produced 200616 MT of Chemicals compared to 190546 MT last year. The Company has produced 105898 KBL of Ethyl Alcohol at Kashipur and Gorakhpur distillery and has produced 891 lacs PET Bottle for the Potable Alcohol plant at Gorakhpur.

Company has set up two 45 TPH SLOP boilers, one at Kashipur and other one at Gorakhpur for fuel saving and for treatment of effluent.

Company has also expanded Guar Gum plant capacity to meet huge demand of Guar oil field derivatives in international market.

Marketing

The Company is the largest manufacturer of Bio-MEG in the world made out of agriculture feedstock i.e. Molasses and Ethanol. Bio-MEG has an application, apart from other products, in PET bottles, which is used for packaging of beverage products. Sale in the Chemical segment has marginally decreased to 191265 MT compared to 193597 MT last year.

The performance of Natural Gums Division under the Chemical Segment had been overwhelming during the year under review. The Natural Gums products had been in high demand through the year and the same momentum is expected in coming years too. Your company has carved a niche in world market and now is known as a consistent quality manufacturer. In order to tap potential and opportunities, your company has undertaken a plan for expansion of production capacity of Natural Gums Division. With the increased capacities, your company will position itself in world market as one of the largest producer of guar gum powder. The existing per month capacity is being expanded further and the expanded capacity will be operational by October 2012.

Exports

During the year under review, your Company has achieved total export turnover of Rs. 1,25,481 lacs as compared to Rs. 70,462 lacs last year. Your Company expects reasonable growth in the overall export sales in the current year. Company has been granted 'One Star Export House' status by Government of India.

Ethyl Alcohol (Potable) & Extra Natural Alcohol

During the year, your Company registered total sales of Rs. 50,168 Lacs compared to Rs. 34,147 Lacs last year in the Ethyl Alcohol (Potable) division. During the year thrust was given on the export of high quality Extra Neutral Alcohol (ENA). The export turnover of Extra Neutral Alcohol (ENA) increased to Rs. 10,281 Lac during the year 2011-2012 as compared to Rs. 8,232 Lacs during the year 2010-11, registering an increase of 25% over the previous year. The Company was awarded Grand Gold Award for the second consecutive year from MONDE SELECTION, Belgium for its high quality of Extra Neutral Alcohol.

Company has the most modern captive distillery in Asia and is having license for operations in and sale of Country Liquor and Indian Made Foreign Liquor (IMFL) in the States of Uttar Pradesh and Uttarakhand. During the year, IMFL brands of the Company have been supplied to Canteen Stores Department (CSD) of Indian Defence Forces.

Company has a tie-up with Bacardi for bottling of their products at our Kashipur bottling unit.

Company is in process of introducing its IMFL brands in the higher range market and extensive brand building program shall be introduced in the current financial year.

Ennature Bio-Pharma Division (100% Export Oriented Undertaking)

Company has a 100% Export Oriented Unit (100% EOU) by the name of Ennature Bio-pharma division. The unit has established Supercritical Fluid Extraction- CO2 and solvent extraction facility at Dehradun. The unit is GMP ISO 9001, ISO22000, HACCP, Kosher and Halal certified. Unit at Dehradun has started production and R&D center duly recognized by Ministry of Science & Technology Government of India is working vigorously on the process of stabilizing and developing various Phytophar maceutical and Nutraceutical products for the developed markets.

Company during the year developed Indian grown health supplements for the developed market with Zero residual solvents by SCF-CO2 technology. These products have given stupendous boost to the growth of the business of Bio-Pharma. During the year, Company has become a qualified supplier to many large conglomerates worldwide for natural colors, nutraceuticals, health supplements and plant based Active Pharmaceuticals Ingredients (APIs). Company has established its name as a quality manufacturer and supplier with stringent QC and QA controls in place.

During the year, your Company registered total sales of Rs. 3,638 lacs as compared to Rs. 1,538 lacs last year in the Ennature Bio-Pharma Division. The Company has major thrust and focus on new Phytochemicals, which company is envisaging to launch.

Industrial Gases

The Company has an Industrial Gases division producing Oxygen, Nitrogen and Argon with an overall capacity of 13,460 NM3/h. During the year under review, Company produced approximately 651 lacs NM3 of Oxygen and 228 lacs NM3 of Nitrogen. Both Oxygen and Nitrogen were successfully marketed and also used for own requirement. Industrial gases division also produced 16 lacs NM3 of Argon.

The Industrial Gases division has also produced food and industrial grade liquid Carbon Di-oxide (CO2) at Kashipur Plant having capacities of 160 MT/day each, to meet growing demand in the domestic market. Company has produced 45296 MT of Carbon Di-oxide (CO2). During the year, Industrial Gases segment registered total sales of Rs. 3,144 lacs compared to Rs. 2,941 lacs last year.

Joint Venture for Private Freight Terminal (PFT)

The Company is setting up a Private Freight Terminal (PFT) under a joint venture with Fourcee Infrastructure Equipments Pvt. Ltd. for providing railways-based logistics services and other facilities at Kashipur, Uttarakhand, as provided under extant guidelines of the Indian Railways. The facility is coming up at the area adjacent to the existing plant of Company at Kashipur.

The Parties have entered into a Joint Venture Agreement to co-operate and partner with each other for the purpose of setting-up, operating and managing the said Private Freight Terminal (PFT) in order to provide multi-modal logistics solutions to our Company and external customers and enhance its service delivery capacity. With the commissioning of this facility, logistics movement for both inbound and outbound cargo would become more dependable, reliable, economical, would also ensure on-time delivery of goods and enable better inventory management.

Expansion/Modernization/Diversification Plans

The Company is actively pursuing growth opportunities and looking at areas to reduce its cost of production. Company is also evaluating plans to further expand its Ethoxylates capacity to improve its product mix and also considering the setting up of a Power Plant to reduce its dependence on external power. Company is also installing additional EO reactor to enhance the EO catalyst life and to have maximum production throughout the life of the catalyst.

Company is also installing another SLOP fired boiler at Kashipur, which will provide additional coal saving. In addition, the Company is actively pursuing expansion opportunities for its business other than Chemicals.

The Company is setting up 10 ton biomass/day capacity pilot plant to convert lignocelluloses agricultural waste biomass to ethanol by using the bench-scale process developed at DBT-ICT Centre for energy Bio-Sciences, Mumbai. The Pilot Plant will use agricultural non-fodder lignocelluloses waste (i.e. Rice Straw, Wheat Straw & Bagasse) as feedstock to manufacture ethanol. The plant will aim at solving technical roadblocks in Lignocelluloses ethanol Technology in order to improve the overall situation with regard to alcohol availability. The plant is being set-up with the Department of Bio-Technology aid/ loan.

Finance

During the year under review, Company has raised Term Loans of Rs. 2533 million and repaid total loans of Rs. 1953 million.

The Company has been regular in meeting its obligations towards payment of principal/interest to Financial Institutions /Banks/Debenture holders/Fixed Deposit holders.

Listing of Securities

The shares of the Company shall continue to be traded at the Bombay Stock Exchange and the National Stock Exchange.

Subsidiary Companies

The Company is having controlling stake in Shakumbari Sugar & Allied Industries Limited (SSAIL), which operates a sugar manufacturing plant in the state of Uttar Pradesh with a crushing capacity of 5500 tonnes per day (TCD) along with a modern distillery of 60 KL per day (KLPD) producing high quality rectified spirit and an internal bagasse fired co-generation plant of 11.4 MW catering to the captive power needs of the sugar and distillery units.

The Company has completed first phase of expansion plan and the capacity of sugar manufacturing plant has been enhanced from 3200 TCD to 5500 TCD and co- generation plant capacity has been enhanced from 3 MW to 10.4 MW of power generation.

The net worth of Shakumbari Sugar and Allied Industries Limited (SSAIL) has been completely eroded as on 31st March, 2012, therefore, reference report under the provisions of Section 15 of the Sick Industrial Companies (Special Provision) Act, 1985 has been filed before BIFR.

Company has a 100% subsidiary in Singapore to augment its activities in South Eastern region & help the marketing of products from Chemical Plant, Natural Gums Plant and Supercritical Fluid Extraction facility to large buyers in US, Europe and South East Asia.

Your Company has three subsidiary companies, i.e. Shakumbari Sugar & Allied Industries Limited (SSAIL), IGL Finance Limited and IGL CHEM International Pte. Ltd. The Ministry of Corporate Affairs, Government of India, vide General Circular dated 8th February 2011 and 21st February 2011 has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular for non-inclusion of Subsidiary Companies' Annual Report with the Annual Report of the Holding Company. The Company has satisfied the conditions stipulated in the circular and hence have availed the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

The Company undertakes that annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the company and of the subsidiary companies concerned. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

Fixed Deposit

The amount of Fixed Deposit held as on 31st March, 2012 was Rs. 9.00 lacs. There are no overdue deposits except unclaimed deposits amounting to Rs. 9.13 lacs.

Directors

Shri R.C. Misra, Shri Autar Krishna and Shri Jitender BalaKrishnan, Directors of the Company, retiring by rotation and being eligible, offer themselves for reappointment. Your Directors recommend the reappointment of retiring Directors for your approval.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2012 and of the profit and loss of the Company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the annual accounts have been prepared on a going concern basis.

Management Discussion and Analysis

A separate report is appended herewith.

Corporate Governance

The Board of Directors supports the broad principles of Corporate Governance. The report on Corporate Governance as stipulated in clause 49, as amended, of the listing agreement with the stock exchanges for the year ended 31st March, 2012 and Auditor's Certificate on Corporate Governance are appended herewith.

Auditors & Audit Report

The Auditors, M/s. Lodha & Co., Chartered Accountants, retiring at the ensuing Annual General Meeting and offer themselves for reappointment. They have confirmed that they are eligible under Section 224(1B) of the Companies Act, 1956 for reappointment.

The Auditors in their Audit Report have invited the attention of the Shareholders towards non provisioning by the Company against the investment in its subsidiary Company, Shakumbari Sugar & Allied Industries Limited (SSAIL) amounting to Rs. 5,427.50 lacs and loans amounting to Rs. 1,546.67 lacs. The Company has already provided its clarification as contained in the note no.34

(ii) & (iii) i.e. considering the intrinsic value of the assets of SSAIL & long term nature of the investment, the management is confident of the recoverability/reliability of the value of Investment and loans provided to SSAIL, therefore, no provision in the opinion of the Management at this stage is considered necessary.

Environment, Energy Conservation, Technology Absorpition, etc.

The Company is working actively on various projects efficiently, approaching and targeting towards Clean Development Mechanism (CDM) and reduction in GHG emissions.

The Company has installed unique technology for converting distillery spentwash into fuel at both the plants viz. Kashipur and Gorakhpur. Through this technology, the spentwash is concentrated through five effect evaporator. The concentrate is utilized as fuel to substitute coal in a specifically designed boiler. The high pressure steam so generated is passed through the turbine for power generation and low pressure steam after turbine is utilized in the plant for operation. Due to this the company is saving fossil fuel in terms of coal and substituting the essential power generation through DG sets.

The Biomass based Cogeneration Project activity taken up by the Company at its Gorakhpur, U.P. plant is successfully registered under Clean Development Mechanism (CDM) project by United Nations Framework Convention on Climate Change (UNFCCC) for ten year fixed crediting period 16/12/2010 to 15/12/2020. Under the Clean Development Mechanism, emission-reduction (or emission removal) projects in developing countries can earn certified emission reduction credits. These saleable credits can be used by developed countries to meet a part of their emission reduction targets under the Kyoto Protocol.

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 and the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 the required information relating to "Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo" is annexed hereto and forms part of this Report.

Human Resources

Your Directors wish to place on record their deep appreciation to employees at all levels for their all-round efforts, dedication, commitment and loyal services which helped in achieving satisfactory performance during the year.

The required information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the Statement of particulars of Employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at Head Office of the Company.

Corporate Social Responsibility

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company, Directors and its dedicated employees continue to contribute towards society by several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

The range of following Corporate Social activities begins in and around Kashipur (Uttarakhand):

1. organizing regular Medical camps (three days a week) so that villagers get medical assistance free of cost;

2. organizing blood donation camps;

3. facilitating plantation of trees for better environment;

4. facilitating in constructing roads, bridges, drains and installing street lamps;

5. promoting schools in vicinity (Ajay Bhartia Saraswati Shisumandir Jr. High School Kashipur);

6. providing furniture and financial assistance for renovation of Community School at village Barkhedi, Kashipur;

7. installed hand pumps for drinking water, which is benefitting nearby areas;

8. extended support to the victims of flood affected during Monsoon;

9. distributing of blankets to poor during winter;

10. providing financial assistance for promotion of sports and socio-cultural activities in the State of Uttarakhand;

11. supporting the local administration in fighting and managing fire accidents and other disasters taking place in the surrounding area of Plant;

Your company has also installed hand pumps for drinking water in the nearby villages of Gorakhpur Distillery and Constructed a shed at village Kalesar for use as community center at Gorakhpur.

Your Company is supporting a community school at Dwarka, New Delhi through Nirmal Bhartia Society for Education Promotion, and a charitable institution by making grants, School is now operational. The school is equipped with modern facilities and also has a good infrastructure. The school possess qualified and experienced faculties, which enable children to make a great future.

Your Company extending educational and on-job training to the students of many professional Institutions and the professionals of many other Management and Engineering Institutions, which helps them to start a new beginning for their future professional career.

At the end your Company constantly strive hard to serve the society by implementing such other policies which benefited people at large.

Acknowledgement

Your Directors place on record their deep appreciation of the support given by the Central Government, States of Uttarakhand and Uttar Pradesh, Financial Institutions and banks and looks forward to their continued support.

for and on behalf of the Board

Place : NOIDA, U.P U.S. Bhartia

Dated :25th July, 2012 Chairman and Managing Director


Mar 31, 2011

To The Members

The Directors are pleased to present Twenty Seventh Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2011.

Financial Results (Rs.in lacs)

Year ended Year ended 31.03.2011 31.03.2010

Sales and other income 185,992 141,290

Profit/(loss) before 10,538 7,391 depreciation, exceptional item and tax

Depreciation 6,862 5,907

Exceptional item Nil (1,626)

Profit/(loss) before tax 3,676 3,110

Provision/(credit) for tax 1,114 1,110

Net profit/(loss) 2,562 2,000

Profit/(loss) brought forward 27,109 25,698

Profit available for 29,671 27,698 appropriation

Dividend

Your Directors are pleased to recommend a dividend of Rs.1.50 (Rupee One and paisa fifty only) per equity share. The outgo on dividend will be Rs.486.09 lacs including tax on dividend.

Performance

During the year under review, performance of the Company has shown improvement consequent to the improvement in the overall economic situation worldwide. The price of Glycols have started showing upward trend in the current year vis a vis last year. However, the prices of feedstock like molasses and alcohol have increased due to the Government decision to increase the use of Ethanol for blending in Petroleum. Keeping in mind the reduction in the prices of the Glycols in the year 2009- 10, Company had diversified towards production of high value added Ethylene Oxide Derivatives (EODs), which has provided better margins as compared to Glycols.

Sales and other income for the year under review has been Rs.185,992 Lacs compared to Rs.141,290 Lacs last year showing an increase by 32% vis a vis last year. Profit before depreciation, exceptional item and tax for the year has been Rs.10,538 Lacs as compared to Rs.7,391 Lacs last year showing an increase by 43%. The net profit after tax for the year has been Rs.2,562 Lacs as compared to net Profit of Rs.2,000 Lacs last year.

The borrowing cost has increased to Rs.8,631 lacs as compared to Rs.6,009 lacs last year, due to increase in the borrowings as well as increase in the overall interest rates by all the banks. The Company has taken various steps to keep the borrowing cost under control by availing PCFC, Buyers credit and converting Rupee Loans into FCNRB Loans.

During the year, your Company produced 76,364 MT of Glycols compared to 47,865 MT last year. Ethylene Oxide Derivatives (EODs) production has been 106,927 MT compared to 97,803 MT last year.

The Company has produced 37,280 KBL of Potable Alcohol and has produced 664 lacs PET Bottle at Gorakhpur for the Potable Alcohol plant at Gorakhpur.

Marketing

The Company is the largest manufacturer of Bio-MEG in the world made out of agriculture feedstock i.e. Molasses and Ethanol. Bio-MEG has an application, apart from other products, in PET bottles, which is used for packaging of beverage products. Sale of Glycols has been 77,572 MT compared to 43,677 MT last year. The sale of Ethylene Oxide Derivatives (EODs) has been 108,585 MT compared to 97,254 MT last year.

Exports

During the year under review, your Company has achieved total export turnover of Rs.70,462 lacs as compared to Rs.41,068 lacs last year. Your Company expects reasonable growth in the overall export sales in the current year. Company has been granted `One Star Export House’ status by Government of India, Office of the Jt. Director General of Foreign Trade.

Natural gum

During the year, your Company achieved total sales of Rs.6,488 lacs of the Natural Gum products out of which the export turnover was Rs.6,322 lacs as compared to total sales of Rs.2,624 lacs last year out of which the export turnover was Rs.2,584 lacs. The Company has registered a growth of 147% in Natural Gum segment, due to high international quality standard. The Company is modifying its existing Guar Gum Plant to upgrade the quality of the product of first hydrating Guar going for Oil Field Industry. The Company has enhanced the production capacity by 50% as against earlier capacity and is also further planning to increase capacity by end of August 2011 to cater to the growing international demand.

Ethyl alcohol (potable) & extra natural alohol

During the year, your Company registered total sales of Rs. 34,147 lacs compared to Rs.38,707 lacs last year in the Ethyl Alcohol (Potable) and Extra Natural Alcohol division. Efforts are being made to increase the sales of Ethyl Alcohol (Potable). Company has the most modern & largest captive distillery in Asia and is among few Companies in the country having license of operations in and sale of Country Liquor and Indian Made Foreign Liquor (IMFL) in the states of Uttar Pradesh and Uttarakhand. During the year, IMFL brands of the Company have been supplied to Defence Forces Canteens (CSD). The Segment contributes around 19% in the total revenues of the Company.

Ennature bio-pharma division (100% export oriented undertaking)

Company has a 100% Export Oriented Unit (100% EOU) by the name of Ennature Bio-pharma division. The Company has taken 47 acres land on lease from Uttarakhand government, where it is growing a wide variety of medicinal plants etc. It has also set up a Supercritical Fluid Extraction facility (SCFE) at Dehradun, which will be cGMP and HACCP compliant. The unit is Kosher certified and approved by Indian Food & Drug Authorities (FDA). SCFE at Dehradun has started production and is in process of stabilizing and developing various Phytopharmaceuticals and Nutraceuticals products. The unit has received accreditation from the Indian Spices Board and has been enrolled as members of Pharmexcil and Shellac Export Promotion Council. This unit will be used for extraction of Dietary Food supplements, Natural Colors, Health care fruits & vegetables, Herbal Extracts, Fruit flavors & fragrances & Spice flavors & extracts. Future thrust is to become supplier of more refined natural active pharmaceutical ingredients (API) & intermediates to pharmaceutical & natural health product industries. All these are very high value added products. Since this will be a 100% EOU, this diversification will provide tax benefit also. During the year, your Company registered total sale of Rs.1,538 lacs in the Ennature Bio Pharma Division.

Industrial gases

The Company has an Industrial Gases division producing Oxygen, Nitrogen and Argon with an overall capacity of 13,460 NM3/h. During the year under review, Company produced approximately 641 lacs NM3 of Oxygen and 218 lacs NM3 of Nitrogen. Both Oxygen and Nitrogen were successfully marketed and also used for own requirement. Industrial gases division also produced 13 lacs NM3 of Argon.

The Industrial Gases division has also produced food and industrial grade liquid Carbon Di-oxide (CO2) at Kashipur Plant having capacities of 160 MT/day each, to meet growing domestic market. Company has produced 46,102 MT of Carbon Di-oxide (CO2). During the year, Industrial Gases segment registered total sales of Rs.2,941 lacs compared to Rs. 2,330 lacs last year.

Joint venture for private freight terminal (PFT)

Our Company is setting up a Private Freight Terminal (PFT) under a joint venture with Fourcee Infrastructure Equipments Pvt. Ltd. as permitted vide Freight Marketing Circular No. 14 of 2010 dated 31.05.2010, and Freight Marketing Circular No. 6 of 2011 dated 21.06.2011 by the Indian Railways, for providing railways-based logistics services and other facilities at Kashipur, Uttarakhand, as provided under extant guidelines of the Indian Railways. The facility would be adjacent to the existing plant of Company at Kashipur.

The Parties have entered into a Memorandum of Understanding to co-operate and partner with each other for the purpose of setting-up, operating and managing the said Private Freight Terminal (PFT) in order to provide multi-modal logistics solutions to our Company and external customers and enhance its service delivery capacity. With the commissioning of this facility, logistics movement for both inbound and outbound cargo would become more dependable, reliable, economical, would also ensure on-time delivery of goods and enable better inventory management.

Expansion / modernisation / diversification plans

The Company is actively pursuing growth opportunities and looking at areas to reduce its cost of production. The Company is evaluating plans to further expand its Ethoxylates capacity to improve its product mix and also considering the setting up of a Power Plant to reduce its dependence on external power. In addition, the Company is actively pursuing expansion opportunities for its business other than Chemicals.

The Company is setting up 10 ton biomass/day capacity pilot plant to convert lignocellulosic agricultural waste biomass to ethanol by using the bench-scale process developed at DBT-ICT Centre for Energy Bio-Sciences, Mumbai. The pilot plant will use agricultural non-fodder lignocellulosic waste (i.e. Rice straw, Wheat straw & Bagasse) as feedstock to manufacture ethanol. The plant will aim at solving technical roadblocks in lignocellulosic ethanol technology in order to improve the overall situation with regard to alcohol availability. The plant is being set-up with the Department of Bio- Technology aid/loan.

Finance

During the year under review, Company has raised Rupee Term Loans of Rs.3,170 million. The Company has repaid total loans of Rs.2,010 million, out of which Company repaid Rupee Term Loan of Rs.1513 million and Foreign Currency Loans of US$ 7.61 million and JPY 276.25 million equivalents to Rs. 497 million.

The Company has been regular in meeting its obligations towards payment of principal/interest to Financial Institutions / Banks / Debentureholders / Fixed Deposit holders.

Listing of securities

The shares of the Company shall continue to be traded at the Bombay Stock Exchange and the National Stock Exchange.

Subsidiary companies

The Company is having controlling stake in Shakumbari Sugar & Allied Industries Limited (SSAIL), which operates a sugar manufacturing plant in the state of Uttar Pradesh with a crushing capacity of 5500 tones per day (TCD) alongwith a modern distillery of 40 KL per day (KLPD) producing high quality rectified spirit, ethanol and country liquor and an internal bagasse fired co-generation plant of 11.4 MW catering to the captive power needs of the sugar and distillery units.

The Company has completed first phase of expansion plan and the capacity of sugar manufacturing plant has been enhanced from 3200 TCD to 5500 TCD and co- generation plant capacity has been enhanced from 3 MW to 10.4 MW of power generation.

Your Company has also established a subsidiary in Singapore to augment its activities in South Eastern region & help the marketing of products from Chemical Plant and Supercritical Fluid Extraction facility to large buyers in US, Europe and South East Asia. Your Company has three, wholly owned subsidiary companies, i.e. Shakumbari Sugar & Allied Industries Limited (SSAIL), IGL Finance Limited and IGL CHEM International Pte. Ltd. The Ministry of Corporate Affairs, Government of India, vide General Circular dated 8th February 2011 and 21st February 2011 has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular for non-inclusion of Subsidiary Companies’ Annual Report with the Annual Report of the Holding Company. The Company has satisfied the conditions stipulated in the circular and hence have availed the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

The Company undertakes that annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the company and of the subsidiary companies concerned. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

Fixed deposit

The amount of Fixed Deposit held as on 31st March, 2011 was Rs.179.68 lacs. There are no overdue deposits except unclaimed deposits amounting to Rs.46.90 lacs.

Directors

Shri Pradip Kumar Khaitan, Shri Ravi Jhunjhunwala and Shri U.S Bhartia, Directors of the Company, retiring by rotation and being eligible, offer themselves for reappointment. Your Directors recommend the reappointment of retiring Directors for your approval.

During the year under review, the Board of Directors has appointed Shri Jitender Balakrishnan as Additional Director of the Company, who will hold the office till ensuing Annual General Meeting of the Company. The Board has recommended the appointment of Shri Jitender Balakrishnan as Director of the Company, whose period of office shall be liable to determination for retirement by rotation.

Directors' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- appropriate accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2011 and of the profit and loss account of the Company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the annual accounts have been prepared on a going concern basis.

Management discussion and analysis

A separate report is appended herewith.

Corporate governance

The Board of Directors supports the broad principles of Corporate Governance. The report on Corporate Governance as stipulated in clause 49, as amended, of the listing agreement with the stock exchanges for the year ended 31st March, 2011 and Auditor’s Certificate on Corporate Governance are appended herewith.

Auditors

The Auditors, M/s. Lodha & Co., Chartered Accountants, retiring at the ensuing Annual General Meeting and offer themselves for reappointment. They have confirmed that they are eligible under Section 224(1B) of the Companies Act, 1956 for reappointment.

Environment, energy conservation, technology absorption, etc.

The Company is working actively on various projects efficiently, approaching and targeting towards Clean Development Mechanism (CDM) and reduction in GHG emissions.

The Company has installed distillery effluent Evaporators at Gorakhpur and the concentrated effluent is burnt in specially designed boiler, the calorific value of concentrated effluent generates super heated steam which is utilized for power generation. In the same way, your company has installed distillery evaporator at Kashipur Plant alongwith Boiler and the same superheated steam produced will generate power in 8.64 MW Turbo generator. The power will be utilized for plant operation as essential power which is being generated by DG set and back pressure steam will be utilized for plant operation.

The Biomass based Cogeneration Project activity taken up bythe Company at its Gorakhpur, U.P plant is successfully registered under Clean Development Mechanism (CDM) project by United Nations Framework Convention on Climate Change (UNFCCC) having equivalent 110157 CERs (certified emission reduction) per annum for ten year fixed crediting period 16/12/2010 to 15/12/2020. Under the Clean Development Mechanism, emission- reduction (or emission removal) projects in developing countries can earn certified emission reduction credits. These saleable credits can be used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol.

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 and the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 the required information relating to “Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo” is annexed hereto and forms part of this Report.

Human resources

Your Directors wish to place on record their deep appreciation to employees at all levels for their all-round efforts, dedication, commitment and loyal services which helped in achieving satisfactory performance during the year.

The required information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the Statement of particulars of Employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at Head Office of the Company.

Social responsibility

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company, Directors and its dedicated employees continue to contribute towards society by several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

The range of our activities begins in and around Kashipur (Uttarakhand) by organizing regular Medical camps (three days a week) so that villagers get medical assistance free of cost and also active participation in organizing blood donation camps, facilitating plantation of trees for better environment, facilitating in constructing roads, bridges, drains and installing street lamps , promoting schools in vicinity (Ajay Bhartia Saraswati Shisumandir Jr High School Kashipur), providing furniture and other infrastructure facilities to nearby school (Barkhedi ) and hand pumps for drinking water, which is benefiting nearby areas. The Company also extends support to the victims of flood affected during Monsoon, distributing of blankets to poor during winter, promoting Sports and socio-cultural activities in the State of Uttarakhand, supporting the local administration in fighting and managing fire accidents and other disasters taking place in the close by areas of factory and other noble works in the surrounding area of factory.

Your Company is supporting a community school at Dwarka, New Delhi through Nirmal Bhartia Society for Education Promotion, and a charitable institution by making grants, School is now operational. The school is equipped with modern facilities and also has a good infrastructure. The school possess qualified and experienced faculties, which enable children to make a great future.

Your Company extending educational and on-job training to the students of many professional Institutions and the professionals of many other Management and Engineering Institutions, which helps them to start a new beginning for their future professional career.

At the end your Directors constantly strive hard to serve the society by implementing such other policies which benefited people at large.

Acknowledgment

Your Directors place on record their deep appreciation of the support given by the Central Government, States of Uttarakhand and Uttar Pradesh, Financial Institutions and banks and looks forward to their continued support.

for and on behalf of the Board

U.S. Bhartia Chairman and Managing Director

Place : NOIDA,U.P Dated : 16th July,2011


Mar 31, 2010

The Directors are pleased to present Twenty Sixth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2010.

Financial Results (Rs. in lacs) Year ended Year ended 31.03.2010 31.03.2009

Sales and other income 138499.40 116960.09

Profit/(loss) before

depreciation, exceptional

item*and tax 7390.50 (3307.90)

Depreciation 5907.16 5673.45

Exceptional item (1626.58) 4743.67

Profit/(loss) before tax 3109.92 (13725.02)

Provision/(credit) for tax 1110.40 (4535.86)

Net profit/(loss) 1999.52 (9189.16)

Profit/(loss) brought forward 25698.40 35213.78

Profit available for appropriation 27697.92 26024.62

Which the directors have appropriated as follows:

- Transfer to general reserve 100.00 0.00

- Proposed dividend 418.24 278.83

- Corporate dividend tax 71.08 47.39

Balance carried forward 27108.60 25698,40

Dividend

Your Directors are pleased to recommend a dividend of Rs. 1.50 (Rupee One and paisa fifty only) per equity share. The outgo on dividend will be Rs.489.32 lacs including tax on dividend.

Performance

During the year under review, performance of the Company has shown significant improvement consequent to the improvement in the overall economic situation worldwide. The price of Glycols have started showing on upward trend and have since improved from a low of US$ 544 per MT to US$ 1005 per MT by last quarter of the year However, the prices of feedstock like molasses and alcohol did not come down in line with international prices of crude oil. During the year under review, the performance was adversely affected as domestic prices of our feedstock viz. molasses and alcohol was high on account of poor availability of sugar cane, therefore, the Company had to depend upon imported Alcohol. Consequently, Company was forced to regulate its Glycols production and diversified toward production of high value Ethylene Oxide Derivatives (EODs), which could provide better margins as compared to Glycols.

Sales and other income for the year under review has been Rs. 134555 Lacs compared to Rs. 114125 Lacs last year and Rs.153.868 Jacs a year before. Profit before. depreciaton exceptional item and tax for the year has been Rs.7390 Lacs as compared to Loss of Rs.3308 Lacs last year and Profit of Rs.30367 lacs a year before and net profit after tax for the year has been Rs.2000 Lacs.

Profitability has also improved on account of reduction in interest cost during the year. The borrowing cost of funds has reduced to Rs.3219 lacs as compared to Rs.7706 lacs last year. This has happened due to better financial management, recourse to low cost borrowings in form of Packing Credit in foreign exchange, Buyers Credit and favorable exchange rate movement.

During the year, your Company produced 47864 MT of Glycols compared to 66327 MT last year. Ethylene Oxide Derivatives (EODs) production has increased to 97804 MT compared to 65196 MT last year. Company has commissioned two Stirred Reactor for enhancing the production capacity of Ethoxylates.

Company has produced 28844 KBL of Alcohol at its distilleries at Kashipur and Gorakhpur, which has supplemented ethanol, required for production of Glycols and Ethylene Oxide Derivatives (EOD) and has reduced the dependence on purchase of external alcohol. Company has also produced 44082 KBL of Potable Alcohol.

Company has set up a Turbo Generator of 12 MW capacity at Kashipur. This plant generates power by using high pressure steam. This has resulted in substantial power saving and reduced dependence on external power.

Company has installed two PET Bottle manufacturing machines at Gorakhpur to manufacture 100 lacs PET Bottles per month for the Potable Alcohol plant at Gorakhpur.

Marketing

The Company is the largest manufacturer of Bio-MEG in the world made out of agriculture reserves i.e. Molasses and Ethanol. Bio-MEG has an application, apart from other

products, in PET bottles used for packaging of beverage products. Sale of Glycols has been 43677 MT compared to 63159 MT last year. The sale of Ethylene Oxide Derivatives (EODs) has been 97254 MT compared to 63908 MT last year.

Exports

During the year under review, your Company has achieved total export turnover of Rs.41068 lacs as compared to Rs.23562 lacs last year. Your Company expects reasonable growth in the overall export sales in the current year. Company has been granted One Star Export House status by Government of India, Office of the Jt. Director General of Foreign Trade.

Natural gum

During the year, your Company achieved total sales of Rs.2624 lacs of the Natural Gum products out of which the export turnover was Rs.2584 lacs compared to total sales of Rs. 1604 lacs last year out of which the export turnover was Rs.1514 lacs. Company is diversifying into the field of Guar Gum derivatives used for Oil Field Industry and Textile Industry. The Company is modifying its existing Guar Gum Plant to produce value added derivatives for Oil Field Industry, specialty derivatives for food & paper industry and Textile Industry.

Ethyl alcohol (potable) & extra natural alohol

During the year, there has been substantial growth in the Ethyl Alcohol (Potable) segment. Your Company registered total sales of Rs.38707 lacs compared to Rs. 26845 lacs last year. Efforts are being made to further increase the sales of Ethyl Alcohol (Potable). Company has most modern & largest captive distillery in Asia and is among few Companies in the country having license of operations in and sale of Country Liquor and Indian Made Foreign Liquor (IMFL) in two states of Uttar Pradesh and Uttarakhand. During the year, IMFL brands of the Company have been approved for Supply to Defence forces Canteens (CSD). The Segment contributes around 29% in the total revenues of the Company.

Ennature bio-pharma division (100% export oriented undertaking)

Company has set up a 100% Export Oriented undertaking (100% EOU) by the name of Ennature Bio-pharma division. The Company has taken 47 acres land on lease from Uttarakhand government, where it is growing a wide variety of medicinal plants etc. It has also set up a Supercritical Fluid Extraction facility (SCFE) at Dehradun, which will be cGMP compliant and in the process of being cGMP and HACCP. The unit is Kosher certified and approved by India Food & Drug Authorities (FDA). SCFE at Dehradun has started on trial production of the plant and is in process of stabilizing and developing various Phytopharmaceuticals and Nutraceuticals products. The unit has received accreditation from the Indian Spices Board and has been enrolled as members of Pharmexcil and Shellac Export Promotion Council. This unit will be used for extraction of Dietary Food supplements, Natural Colors, Health care fruits & vegetables, Herbal Extracts, Fruit flavors & fragrances & Spice flavors & extracts. Future thrust is to become supplier of more refined natural active pharmaceutical ingredients (API) & intermediates to pharmaceutical & natural health product industries. All these are very high value added products. Since this will be a 100% EOU, this diversification will provide tax benefit also.

Industrial gases

The Company has also set up an Industrial Gases division producing Oxygen, Nitrogen and Argon with an overall capacity of 13460 NM3/h. During the year under review, Company produced 55095402 NM3 of Oxygen and 16119619 NM3 of Nitrogen. Both Oxygen and Nitrogen were successfully marketed and also used for own requirement. Industrial gases division also produced 1449028 NM3 of Argon.

The Industrial Gases division has diversified to produce food and industrial grade liquid Carbon Di-oxide (C02) at Kashipur Plant having capacities of 160 MT/day each, to meet growing domestic market. Company has produced 30394 MT of Carbon Di-oxide (C02). During the year, Industrial Gases segment registered total sales of Rs.2330 lacs compared to Rs.1607 lacs last year.

RAB (concentrated sugarcane juice)

During the year under review, RAB (concentrated sugarcane juice) unit was completely operational. Entire production of RAB consumed captively to supplement ethanol requirement.

Expansion / modernisation / diversification plans

The Company is actively pursuing growth opportunities and looking at areas to reduce its cost of production. The Company is evaluating plans to further expand its Ethoxylates capacity to improve its product mix and also considering the setting up of a Power Plant to reduce its dependence on external power. In addition, the Company is actively pursuing expansion opportunities for its business other than Chemicals.

Finance

During the year under review, Company has raised Rupee Term Loans of Rs.245 Crores to part finance the project cost of ongoing capital expenditure. The Company has repaid total loans of Rs.204.03 Crores, out of which Company repaid Rupee Term Loan of Rs. 122.52 Crores and Foreign Currency Loans of US$ 13.29 million and JPY 276.25 million equivalents to Rs.81.51 crores.

The Company has been regular in meeting its obligations towards payment of principal/interest to Financial Institutions/Banks/Debentureholders/Fixed Deposit holders.

Listing of securities

The shares of the Company shall continue to be traded at the Bombay Stock Exchange and the National Stock Exchange.

Subsidiary companies

The Company is having controlling stake in Shakumbari Sugar & Allied Industries Limited (SSAIL), which operates a sugar manufacturing plant in the state of Uttar Pradesh with a crushing capacity of 5500 tones per day (TCD) alongwith a modern distillery of 40 KL per day (KLPD) producing high quality rectified spirit, ethanol and country liquor and an internal bagasse fired co-generation plant of 11,4 MW catering to the captive power needs of the sugar and distillery units.

The Company has completed first phase of expansion plan and the capacity of sugar manufacturing plant has been enhanced from 3200 TCD to 5500 TCD and co-generation plant capacity has been enhanced from 3 MW to 10.4 MW of power generation. In the second phase of expansion plan, the capacity of sugar manufacturing plant will be enhanced from 5500 TCD to 7500 TCD, the

distillerys capacity would be expanded to 85 KLPD from the present 40 KLPD for making ethanol from molasses/ sugarcane juice and co-generation plant capacity will be enhanced from 10.4 MW to 25.5 MW of power generation out of which approximately 15.5 MW power generation will be used to cater the captive power need of expanded sugar and distillery units, the surplus power of approximately 10 MW will be sold to grid.

Your Company has also established a subsidiary in Singapore to augment its activities in South Eastern region & help the marketing of products from Supercritical Fluid Extraction facility at Dehradun to large buyers in US & Europe.

As required under Section 212 of the Companies Act, 1956, the Audited statement of accounts, alongwith the report of the Board of Directors and the Auditors Report thereon, of the subsidiary Company viz. IGL Finance Limited, IGLCHEM International Pte. Ltd. and Shakumbari Sugar and Allied Industries Ltd., for the year ended 31st March, 2010, are annexed.

Fixed deposit

The amount of Fixed Deposit held as on 31st March, 2010 was Rs. 1133.40 lacs. There are no overdue deposits except for unclaimed deposits amounting to Rs. 390.60 lacs.

Directors

Shri M.K. Rao, Smt. Jayshree Bhartia and Shri Jagmohan N, Kejriwal, Directors of the Company, retiring by rotation and being eligible, offer themselves for reappointment. Your Directors recommend the reappointment of retiring Directors for your approval.

Directors responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

Appropriate accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2010 and of the profit and loss of the Company for that period;

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

The annual accounts have been prepared on a going concern basis,

Corporate governance

The Board of Directors supports the broad principles of Corporate Governance. The report on Corporate Governance as stipulated in clause 49, as amended, of the listing agreement with the stock exchanges for the year ended 3lst March, 2010 and Auditors Certificate on Corporate Governance are appended herewith.

Auditors

The Auditors, M/s Lodha & Co., Chartered Accountants, laliung at the ensuing Annual General Meeting and offer themselves for reappointment. They have confirmed that they are eligible under Section 224(1 B) of the Companies Act. 1056 for reappointment.

Environment, energy conservation, technology absorption, etc.

Your Company has taken various measures for energy conservation at its chemical plant, such as installation of Extraction / Back pressure steam turbine capacity 8.64 MW. use of MP steam instead of HP steam in all three new evaporator trim reboiiers of MEG resulting in increased power generation from Extraction/Backpressure turbine, Utilized hot condensate in GEA and GE to generate LP steam I Utilized steam condensate to generate flash steam in Guar Gum unit, MEG return condensate for Rab boiler deaerator resulting in increase heat recovery from MEG DM water preheater, LP Steam saving in T-320 by utilization of steam generated from MEG column condenser OSBL Alcohol preheating by utilization of heat

of recycle water, Reducing the RFO consumption in MEG heater by maximizing the bio gas in heater, and Preheating of 12 MW turbine Condensate with Dehydration Steam Condensate (Exchanger is to be replaced with new exchanger) Process condensate of evaporator plant is used as a dilution in fermentation house water resulting in raw water and energy saving.

Energy conservation measures have also been taken at Distillery plant such as use of Centrifuge Decanter (4 nos) commissioned to reduce the T.S.S. in effluent feed, resulting in reduction of scaling frequency of evaporator calandria, use of process steam condensate of ENA plant as a boiler feed water thereby enhancing the steam condensate recovery and Installation of Economizer & Air pre heater in existing Boiler for recovery of energy from the flue gases.

Your Company has also taken environmental conservation measures by setting up a bio-composting facility to produce natural manure as a substitution to chemical fertilizers. Company is also working actively for reducing effluent generation at source by achieving zero discharge by way of adopting ferti-irrigation, bio-composting, Reverse Osmosis (RO), concentration followed by incineration to conserve the fossil fuel and other effective and competitive techniques. Company is also working actively on various projects efficiently, approaching and targeting towards Clean Development Mechanism (CDM) and reduction in GHG emissions.

The Company has installed distillery effluent Evaporators at Gorakhpur and the concentrated effluent is burnt in specially designed boiler the calorific value of concentrated effluent generates super heated steam which is utilized for power generation. In the same way, your company has installed distillery evaporator at Kashipur Plant alongwith Boiler and the same superheated steam produced will generate power in 9 MW back pressure Turbo generator. The power will be utilized for plant operation as essential power which is being generated by DG set and back pressure steam will be utilized for plant operation.

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 and the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 the required information relating to "Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo" is annexed hereto and forms part of this Report.

Human resources

Your Directors wish to place on record their deep appreciation to employees at all levels for their all-round efforts, dedication, commitment and loyal services which helped in achieving satisfactory performance during the year.

The required information as per Section 217(2A) of the Companies Act. 1956 read with Companies (Particular of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1 )(b) (iv) of the Companies Act, 1956, the report and accounts are being sent to all shareholders of the Company excluding the Statement of particulars of Employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at Head Office of the Company.

Social responsibility

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the general public. Your Company, Directors and its dedicated employees continue to contribute towards society by several worthwhile causes. Your Company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

The range of our activities begins in and around Kashipur (Uttarakhand) by organizing regular Medical camps (three days a week) so that villagers get medical assistance free of cost and also active participation in organizing blood donation camps, facilitating plantation of trees for better environment, facilitating in constructing roads, bridges, drains and installing street lamps and hand pumps for drinking water, which is benefiting near by areas. The Company also extends support to the victims of flood affected during Monsoon, distributing of blankets to poor during winter, promoting Sports and socio-cultural activities in the State of Uttarakhand. supporting tne local administration in fighting and managing fire accidents and other disasters taking place in the close by areas of factory and other noble works in the surrounding area of factorv

Your Company is supporting a community school at Dwarka, New Delhi through Nirmal Bhartia Society for Education Promotion, and a charitable institution by making grants, School is now operational. "the school is equipped with modern facilities and also has a good infrastructure. The school posses qualified and experienced faculties, which enable children to make a great future.

The Company has also sponsored a faculty position m Herbal Research & Development Institute, Centre of Aromatic Plants at Dehradun to promote the Herbal Development in the state of Uttarakhand

Your Company extending educational and on-job training to the students of many professional institutions and the professionals of many other Management and Engineering Institutions, which helps them to start a new beginning for their future professional career.

At the end your Directors constantly strive hard to serve the society by implementing such other policies which benefited people at large.

Acknowledgement

Your Directors place on record their deep appreciation of the support given by the Central Government Slate; of Uttarakhand and Uttar Pradesh, Financial institutions and banks and looks forward to their continued support.

for and on behalf of the Board

Place : Noida, U.P. U.S. Bhartia

Dated : 4th May, 2010 Chairman and Managing Director

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